Вы находитесь на странице: 1из 139

Summary of amendments introduced by TRAIN

I. Income Tax
Tax Code Present Provision TRAIN Amendment Reform Measure
Provision

1. Income Tax (2) Rates of Tax on Taxable Income of (2) Rates of Tax on Taxable Income of Individuals. 1. Restructures the income tax
Rates [Section Individuals. − The tax shall be computed in − The tax shall be computed in accordance with rates for individual taxpayers
24(A)(2)] accordance with and at the rates established in and at the rates established in the following by replacing the existing 5%-
the following schedule: schedule: 32% graduated tax rates with
0%- 35% progressive tax rates
(A) TAX SCHEDULE EFFECTIVE JANUARY 1, with the number of tax
2018 UNTIL DECEMBER 31, 2022: brackets reduced from seven to
six, and thresholds for each tax
Not over P10,000………………………… 5% Not Over P250,000 – 0% bands adjusted. Under the
TRAIN, individual taxpayers
Over P10,000 but not over P30,000 - P500 Over P250,000 but not over P400,000 - 20% of who have less than P250,000
plus 10% of the excess over P10,000 the excess over P250,000 taxable income will fall into the
lowest tax bracket, and their
Over P30,000 but not over P70,000 - P2,500 Over P400,000 but not over P800,000 - P30,000 income will be subject to 0%
plus 15% of the excess over P30,000 plus 25% of the excess over P400,000 income tax rate while the tax
rate applicable on the taxable
Over P70,000 but not over P140,000 - P8,500 Over P800,000 but not over P2M - P130,000 plus income of those earning above
plus 20% of the excess over P70,000 30% of the excess over P800,000 P8M will be raised from 32% to
35%.
Over P140,000 but not over P250,000 - Over P2M but not over P8M - P490,000 + 32% of
P22,500 plus 25% of the excess over the excess over P2M
P140,000

Over P250,000 but not over P500,000 - Over P8M – P2,410,000 + 35% of the excess over
P50,000 plus 30% of the excess over P8M
P250,000

Page 1 of 139
Over P500,000 ……… P125,000 + 32% of the
excess over P500,000

TAX SCHEDULE EFFECTIVE JANUARY 1, 2023 2. Starting 01 January 2023,


AND ONWARDS introduces a new tax schedule
which will reduce the
Not Over P250,000 – 0% applicable tax rate on income
of taxpayers, except those in
Over P250,000 but not over P400,000 - 15% of the top income tax bracket or
the excess over P250,000 those earning more than P8M
who shall continue to be
Over P400,000 but not over P800,000 – P22,500 subject to 35%.
plus 20% of the excess over P400,000

Over P800,000 but not over P2M - P102,500 plus


25% of the excess over P800,000

Over P2M but not over P8M - P402,500 plus 30%


of the excess over P2M

Over P8M - P2,202,500 plus 35% of the excess


over P8M

2. Tax-exempt (e) 13th Month Pay and Other Benefits. – (e) 13th Month Pay and Other Benefits. – Gross Increases the amount of tax-
threshold for 13th Gross benefits received by officials and benefits received by officials and employees of exempt 13th month pay and
month pay and employees of public and private entities: public and private entities: Provided, however, other benefits from P82,000 to
other bonuses Provided, however, That the total exclusion That the total exclusion under this subparagraph P90,000.
[Section 32 under this subparagraph shall not exceed shall not exceed [eighty-two] NINETY thousand
B(1)(7)(e)] eighty-two thousand pesos (P82,000) which pesos [(P82,000)] (P90,000) which shall cover:
shall cover:
(i) Benefits received by officials and employees of
(i) Benefits received by officials and the national and local government pursuant to
employees of the national and local Republic Act No. 6686;
government pursuant to Republic Act No.
6686;
(ii) Benefits received by employees pursuant to
(ii) Benefits received by employees pursuant Presidential Decree No. 851, as amended by
to Presidential Decree No. 851, as amended
Page 2 of 139
by Memorandum Order No. 28, dated August Memorandum Order No. 28, dated August 13,
13, 1986; 1986;

(iii) Benefits received by officials and (iii) Benefits received by officials and employees
employees not covered by Presidential Decree not covered by Presidential Decree No. 851, as
No. 851, as amended by Memorandum Order amended by Memorandum Order No. 28, dated
No. 28, dated August 13, 1986; and August 13, 1986; and

(iv) Other benefits such as productivity (iv) Other benefits such as productivity incentives
incentives and Christmas bonus: Provided, and Christmas bonus[: Provided, That every
That every three (3) years after the effectivity three (3) years after the effectivity of this Act,
of this Act, the President of the Philippines the President of the Philippines shall adjust the
shall adjust the amount herein stated to its amount herein stated to its present value using
present value using the Consumer Price Index the Consumer Price Index (CPI), as published by
(CPI), as published by the National Statistics the National Statistics Office (NSO).]
Office (NSO).
3. Personal and SEC. 35. Allowance of Personal Exemption for Repealed. Eliminates the personal and
additional Individual Taxpayer. – additional exemption
exemption allowances which means that
allowances (A) In General. – For purposes of fixed income earners or
[Section 35] determining the tax provided in Section 24(A) compensation income earners
of this Title, there shall be allowed a basic will be uniformly taxed on gross
personal exemption amounting to Fifty basis, without regard to their
thousand pesos (P50,000) for each individual circumstances.
taxpayer.

In the case of married individuals where


only one of the spouses is deriving gross
income, only such spouse shall be allowed the
personal exemption.

(B) Additional Exemption for Dependents.


– There shall be allowed an additional
exemption of Twenty-five thousand pesos
(P25,000) for each dependent not exceeding
four (4).

Page 3 of 139
The additional exemption for dependents
shall be claimed by only one of the spouses in
the case of married individuals.

In the case of legally separated spouses,


additional exemptions may be claimed only by
the spouse who has custody of the child or
children: Provided, That the total amount of
additional exemptions that may be claimed by
both shall not exceed the maximum additional
exemptions herein allowed.

4. Deductibility of (M) Premium Payments on Health and/or Deleted. Removes the deductibility of
premium Hospitalization Insurance of an Individual premium payments on health
payments on Taxpayer. – The amount of premiums not to and/or hospitalization insurance
health and exceed Two thousand four hundred pesos in the amount of P2,400 per
hospitalization (P2,400) per family or Two hundred pesos family or P200 a month from
insurance (P200) a month paid during the taxable year gross income of individual
[Section 34(M)] for health and/or hospitalization insurance taxpayers.
taken by the taxpayer for himself, including
his family, shall be allowed as a deduction
from his gross income: Provided, That said
family has a gross income of not more than
Two hundred fifty thousand pesos (P250,000)
for the taxable year: Provided, finally, That in
the case of married taxpayers, only the
spouse claiming the additional exemption for
dependents shall be entitled to this deduction.
5. Fringe benefit SEC. 33. Special Treatment of Fringe Benefit. SEC. 33. Special Treatment of Fringe Benefit. – Increases the fringe benefit tax
tax [Section – (FBT) rate from 32% to 35%.
33(A)]
(A) Imposition of Tax. – A final tax of (A) Imposition of Tax. – EFFECTIVE JANUARY
thirty-four percent (34%) effective January 1, 1, 2018 AND ONWARDS, [A] A final tax of
1998; thirty-three percent (33%) effective [thirty-four percent (34%) effective January 1,
January 1, 1999; and thirty-two percent 1998; thirty-three percent (33%) effective
(32%) effective January 1, 2000 and January 1, 1999; and thirty-two percent (32%)
thereafter, is hereby imposed on the grossed- effective January 1, 2000 and thereafter,]
Page 4 of 139
up monetary value of fringe benefit furnished THIRTY FIVE PERCENT (35%), is hereby
or granted to the employee (except rank and imposed on the grossed-up monetary value of
file employees as defined herein) by the fringe benefit furnished or granted to the
employer, whether an individual or a employee (except rank and file employees as
corporation (unless the fringe benefit is defined herein) by the employer, whether an
required by the nature of, or necessary to the individual or a corporation (unless the fringe
trade, business or profession of the employer, benefit is required by the nature of, or necessary
or when the fringe benefit is for the to the trade, business or profession of the
convenience or advantage of the employer). employer, or when the fringe benefit is for the
The tax herein imposed is payable by the convenience or advantage of the employer). The
employer which tax shall be paid in the same tax herein imposed is payable by the employer
manner as provided for under Section 57(A) of which tax shall be paid in the same manner as
this Code. The grossed-up monetary value of provided for under Section 57(A) of this Code.
the fringe benefit shall be determined by The grossed-up monetary value of the fringe
dividing the actual monetary value of the benefit shall be determined by dividing the actual
fringe benefit by sixty-six percent (66%) monetary value of the fringe benefit by [sixty-six
effective January 1, 1998; sixty-seven percent percent (66%) effective January 1, 1998; sixty-
(67%) effective January 1, 1999; and sixty- seven percent (67%) effective January 1, 1999;
eight percent (68%) effective January 1, 2000 and sixty-eight percent (68%) effective January
and thereafter: Provided, however, That fringe 1, 2000 and thereafter] SIXTY-FIVE PERCENT
benefit furnished to employees and taxable (65%) EFFECTIVE JANUARY 1, 2018 AND
under Subsections (B), (C), (D) and (E) of ONWARDS: Provided, however, That fringe
Section 25 shall be taxed at the applicable benefit furnished to employees and taxable under
rates imposed thereat: Provided, further, That Subsections (B), (C), (D) and (E) of Section 25
the grossed-up value of the fringe benefit shall shall be taxed at the applicable rates imposed
be determined by dividing the actual monetary thereat: Provided, further, That the grossed-up
value of the fringe benefit by the difference value of the fringe benefit shall be determined by
between one hundred percent (100%) and the dividing the actual monetary value of the fringe
applicable rates of income tax under benefit by the difference between one hundred
Subsections (B), (C), (D), and (E) of Section percent (100%) and the applicable rates of
25. income tax under Subsections (B), (C), (D) and
(E) of Section 25.
6. Tax on income (2) Rates of Tax on Taxable Income of (B) RATE OF TAX ON INCOME OF PURELY 1. Income of purely self-
of self-employed Individuals. − The tax shall be computed in SELF-EMPLOYED INDIVIDUALS AND/OR employed individuals and/or
individuals and accordance with and at the rates established PROFESSIONALS WHOSE GROSS SALES OR professionals - Self-employed
professionals in the following schedule: GROSS RECEIPTS AND OTHER NON- individuals and/or professionals
[Section 24(2)] OPERATING INCOME DOES NOT EXCEED THE may, at their option, be subject
Not over P10,000………………………… 5% VALUE-ADDED TAX (VAT) THRESHOLD AS to either 8% on gross sales or
Page 5 of 139
PROVIDED IN SECTION 109 (BB). – SELF- gross receipts and other non-
Over P10,000 but not over P30,000 -P500 EMPLOYED INDIVIDUALS AND/OR operating income in excess of
plus 10% of the excess over P10,000 PROFESSIONALS SHALL HAVE THE OPTION P250,000 or regular individual
TO AVAIL OF AN EIGHT PERCENT (8%) TAX income tax rates. The 8% tax
Over P30,000 but not over P70,000 - P2,500 ON GROSS SALES OR GROSS RECEIPTS AND shall be in lieu of graduated
plus 15% of the excess over P30,000 OTHER NON-OPERATING INCOME IN EXCESS income tax rates and
OF TWO HUNDRED FIFTY THOUSAND PESOS percentage tax.
Over P70,000 but not over P140,000 - P8,500 (P250,000) IN LIEU OF THE GRADUATED
plus 20% of the excess over P70,000 INCOME TAX RATES UNDER SUBSECTION 2. Income of mixed income
(A)(2)(A) OF THIS SECTION AND THE earners –
Over P140,000 but not over P250,000 - PERCENTAGE TAX UNDER SECTION 116 OF
P22,500 plus 25% of the excess over THIS CODE. a. On compensation income -
P140,000 They shall be subject to
“(C) RATE OF TAX FOR MIXED INCOME graduated income tax rates
Over P250,000 but not over P500,000 - EARNERS – TAXPAYERS EARNING BOTH for compensation income.
P50,000 plus 30% of the excess over COMPENSATION INCOME AND INCOME b. On income from business
P250,000 FROM BUSINESS OR PRACTICE OF and/or practice of
PROFESSION SHALL BE SUBJECT TO THE profession -
Over P500,000 - P125,000 plus 32% of the FOLLOWING TAXES:
excess over P500,000 1. Those whose gross sales
1. ALL INCOME FROM COMPENSATION - or gross receipts and
THE RATES PRESCRIBED UNDER other non-operating
SUBSECTION (A)(2)(A) OF THIS SECTION. income do not exceed
the VAT threshold –
2. ALL INCOME FROM BUSINESS OR They shall have the
PRACTICE OF PROFESSION – option to be subject to
8% tax based on gross
(A) IF TOTAL GROSS SALES AND/OR sales or receipts and
GROSS RECEIPTS AND OTHER NON- other non-operating
OPERATING INCOME WHICH DO NOT income from business or
EXCEED THE VALUE-ADDED TAX (VAT) practice of profession or
THRESHOLD AS PROVIDED IN SECTION graduated income tax
109(BB) OF THIS CODE. - THE RATES rates.
PRESCRIBED UNDER SUBSECTION (A)(2)(A)
OF THIS SECTION ON TAXABLE INCOME, OR 2. Those whose gross sales
EIGHT PERCENT (8%) INCOME TAX BASED or gross receipts and
ON GROSS SALES OR GROSS RECEIPTS AND other non-operating
OTHER NON-OPERATING INCOME IN LIEU income exceed the VAT
Page 6 of 139
OF THE GRADUATED INCOME TAX RATES threshold – No option
UNDER SUBSECTION (A)(2)(A) OF THIS available. They shall be
SECTION AND THE PERCENTAGE TAX UNDER subject to the graduated
SECTION 116 OF THIS CODE. income tax rates.

(B) IF TOTAL GROSS SALES AND/OR


GROSS RECEIPTS AND OTHER NON-
OPERATING INCOME WHICH EXCEEDS THE
VALUE-ADDED TAX (VAT) THRESHOLD AS
PROVIDED IN SECTION 109 (BB) OF THIS
CODE. - THE RATES PRESCRIBED UNDER
SUBSECTION (A)(2)(A) OF THIS SECTION.
7. Option to elect (L) Optional Standard Deduction. – In lieu of (L) Optional Standard Deduction (OSD). – In lieu Inserts a provision allowing
optional the deductions allowed under the preceding of the deductions allowed under the preceding general professional
standard Subsections, an individual subject to tax Subsections, an individual subject to tax under partnerships (GPPs) and the
deduction (OSD) under Section 24, other than a nonresident Section 24, other than a nonresident alien, may partners comprising the
- general alien, may elect a standard deduction in an elect a standard deduction in an amount not partnership to avail of the
professional amount not exceeding forty percent (40%) of exceeding forty percent (40%) of his gross sales optional standard deduction
partnerships and his gross sales or gross receipts, as the case or gross receipts, as the case may be. In the (OSD) only once, which option
partners [Section may be. In the case of a corporation subject case of a corporation subject to tax under shall either be exercised either
34(L)] to tax under Sections 27(A) and 28(A)(1), it Sections 27(A) and 28(A)(1), it may elect a by the GPP or the partners
may elect a standard deduction in an amount standard deduction in an amount not exceeding comprising the partnership.
not exceeding forty percent (40%) of its forty percent (40%) of its gross income as
gross income as defined in Section 32 of this defined in Section 32 of this Code. Unless the
Code. Unless the taxpayer signifies in his taxpayer signifies in his return his intention to
return his intention to elect the optional elect the optional standard deduction, he shall be
standard deduction, he shall be considered as considered as having availed himself of the
having availed himself of the deductions deductions allowed in the preceding Subsections.
allowed in the preceding Subsections. Such Such election when made in the return shall be
election when made in the return shall be irrevocable for the taxable year for which the
irrevocable for the taxable year for which the return is made: Provided, That an individual who
return is made: Provided, That an individual is entitled to and claimed for the optional
who is entitled to and claimed for the optional standard deduction shall not be required to
standard deduction shall not be required to submit with his tax return such financial
submit with his tax return such financial statements otherwise required under this Code:
statements otherwise required under this PROVIDED, FURTHER, THAT A GENERAL
Code: Provided, further, That except when PROFESSIONAL PARTNERSHIP AND THE
the Commissioner otherwise permits, the said PARTNERS COMPRISING SUCH
Page 7 of 139
individual shall keep such records pertaining PARTNERSHIP MAY AVAIL OF THE
to his gross sales or gross receipts, or the OPTIONAL STANDARD DEDUCTION ONLY
said corporation shall keep such records ONCE, EITHER BY THE GENERAL
pertaining to his gross income as defined in PROFESSIONAL PARTNERSHIP OR THE
Section 32 of this Code during the taxable PARTNERS COMPRISING THE
year, as may be required by the rules and PARTNERSHIP: Provided, FINALLY [further],
regulations promulgated by the Secretary of That except when the Commissioner otherwise
Finance, upon recommendation of the permits, the said individual shall keep such
Commissioner. records pertaining to his gross sales or gross
receipts, or the said corporation shall keep such
records pertaining to his gross income as defined
in Section 32 of this Code during the taxable
year, as may be required by the rules and
regulations promulgated by the Secretary of
Finance, upon recommendation of the
Commissioner.
8. Fifteen percent (C) Alien Individual Employed by Regional or (F) THE PREFERENTIAL TAX TREATMENT Removes the privilege to avail
(15%) Area Headquarters and Regional Operating PROVIDED IN SUBSECTIONS (C), (D), AND of the 15% preferential tax rate
preferential tax Headquarters of Multinational Companies. – (E) OF THIS SECTION SHALL NOT BE on gross income of employees
rate on aliens There shall be levied, collected and paid for APPLICABLE TO REGIONAL HEADQUARTERS of ROHQs/RHQs, OBUs and
employed by each taxable year upon the gross income (RHQS), REGIONAL OPERATING Petroleum Contractors and
ROHQs/RHQs, received by every alien individual employed HEADQUARTERS (ROHQS), OFFSHORE Subcontractors which shall be
OBUs and by regional or area headquarters and regional BANKING UNITS (OBUS) OR PETROLEUM established starting 01 January
Petroleum operating headquarters established in the SERVICE CONTRACTORS AND 2018. This means that existing
Contractors and Philippines by multinational companies as SUBCONTRACTORS REGISTERING WITH THE RHQs, ROHQs, OBUs and
Subcontractors salaries, wages, annuities, compensation, SECURITIES AND EXCHANGE COMMISSION Petroleum Service Contractors
remuneration and other emoluments, such as (SEC) AFTER JANUARY 1, 2018: PROVIDED, and Subcontractors presently
honoraria and allowances, from such regional HOWEVER, THAT EXISTING RHQS/ROHQS, availing of the 15% preferential
or area headquarters and regional operating OBUS OR PETROLEUM SERVICE tax rate for their qualified
headquarters, a tax equal to fifteen percent CONTRACTORS AND SUBCONTRACTORS employees shall continue to be
(15%) of such gross income: Provided, PRESENTLY AVAILING OF PREFERENTIAL entitled to avail of the
however, That the same tax treatment shall TAX RATES FOR QUALIFIED EMPLOYEES preferential tax rate for their
apply to Filipinos employed and occupying the SHALL CONTINUE TO BE ENTITLED TO present and future qualified
same position as those of aliens employed by AVAIL OF THE PREFERENTIAL TAX RATE FOR employees.
these multinational companies. For purposes PRESENT AND FUTURE QUALIFIED
of this Chapter, the term 'multinational EMPLOYEES.
company' means a foreign firm or entity
engaged in international trade with affiliates
Page 8 of 139
or subsidiaries or branch offices in the Asia-
Pacific Region and other foreign markets.

(D) Alien Individual Employed by Offshore


Banking Units. – There shall be levied,
collected and paid for each taxable year upon
the gross income received by every alien
individual employed by offshore banking units
established in the Philippines as salaries,
wages, annuities, compensation,
remuneration and other emoluments, such as
honoraria and allowances, from such offshore
banking units, a tax equal to fifteen percent
(15%) of such gross income: Provided,
however, That the same tax treatment shall
apply to Filipinos employed and occupying the
same position as those of aliens employed by
these offshore banking units.

(E) Alien Individual Employed by Petroleum


Service Contractor and Subcontractor. – An
alien individual who is a permanent resident
of a foreign country but who is employed and
assigned in the Philippines by a foreign
service contractor or by a foreign service
subcontractor engaged in petroleum
operations in the Philippines shall be liable to
a tax of fifteen percent (15%) of the salaries,
wages, annuities, compensation,
remuneration and other emoluments, such as
honoraria and allowances, received from such
contractor or subcontractor: Provided,
however, That the same tax treatment shall
apply to a Filipino employed and occupying
the same position as an alien employed by
petroleum service contractor and
subcontractor.

Page 9 of 139
Any income earned from all other sources
within the Philippines by the alien employees
referred to under Subsections (C), (D) and
(E) hereof shall be subject to the pertinent
income tax, as the case may be, imposed
under this Code.

9. Rate of Tax on (B) Rate of Tax on Certain Passive Income: – (B) Rate of Tax on Certain Passive Income: –
Passive Incomes
[Section (1) Interests, Royalties, Prizes, and Other (1) Interests, Royalties, Prizes, and Other
24(B)(1) & (2) Winnings. – A final tax at the rate of twenty Winnings. – A final tax at the rate of twenty
and (C), and percent (20%) is hereby imposed upon the percent (20%) is hereby imposed upon the
27(D)(1) and amount of interest from any currency bank amount of interest from any currency bank deposit
(2)] deposit and yield or any other monetary and yield or any other monetary benefit from
benefit from deposit substitutes and from trust deposit substitutes and from trust funds and
funds and similar arrangements; royalties, similar arrangements; royalties, except on books,
except on books, as well as other literary as well as other literary works and musical
works and musical compositions, which shall compositions, which shall be imposed a final tax of
be imposed a final tax of ten percent (10%); ten percent (10%); prizes (except prizes
prizes (except prizes amounting to Ten amounting to Ten thousand pesos (P10,000) or
thousand pesos (P10,000) or less which shall less which shall be subject to tax under Subsection
be subject to tax under Subsection (A) of (A) of Section 24; and other winnings (except
Section 24; and other winnings (except WINNINGS AMOUNTING TO TEN THOUSAND 1. PCSO and Lotto Winnings
Philippine Charity Sweepstakes and Lotto PESOS (P10,000) OR LESS FROM Philippine – Subjects to 20% final
winnings), derived from sources within the Charity Sweepstakes and Lotto [winnings] withholding tax PCSO and
Philippines: Provided, however, That interest WHICH SHALL BE EXEMPT), derived from Lotto winnings amounting to
income received by an individual taxpayer sources within the Philippines: Provided, however, more than P10,000. PCSO
(except a nonresident individual) from a That interest income received by an individual and Lotto winnings
depository bank under the expanded foreign taxpayer (except a nonresident individual) from a amounting to P10,000 or
currency deposit system shall be subject to a depository bank under the expanded foreign less are tax exempt.
final income tax at the rate of seven and one- currency deposit system shall be subject to a final
half percent (7 1/2%) of such interest income: income tax at the rate of [seven and one-half
Provided, further, That interest income from percent (7 1/2%)] FIFTEEN PERCENT (15%) of 2. Interest income on
long-term deposit or investment in the form of such interest income: Provided, further, That foreign currency bank
savings, common or individual trust funds, interest income from long-term deposit or deposits – Increases the
deposit substitutes, investment management investment in the form of savings, common or tax rate on interest income
accounts and other investments evidenced by individual trust funds, deposit substitutes, (whether received by an
certificates in such form prescribed by the investment management accounts and other individual taxpayer or
Page 10 of 139
Bangko Sentral ng Pilipinas (BSP) shall be investments evidenced by certificates in such form corporation) from foreign
exempt from the tax imposed under this prescribed by the Bangko Sentral ng Pilipinas currency bank deposits from
Subsection: Provided, finally, That should the (BSP) shall be exempt from the tax imposed under 7.5% to 15%.
holder of the certificate pre-terminate the this Subsection: Provided, finally, That should the
deposit or investment before the fifth (5th) holder of the certificate pre-terminate the deposit
year, a final tax shall be imposed on the entire or investment before the fifth (5th) year, a final
income and shall be deducted and withheld by tax shall be imposed on the entire income and
the depository bank from the proceeds of the shall be deducted and withheld by the depository
long-term deposit or investment certificate bank from the proceeds of the long-term deposit
based on the remaining maturity thereof: or investment certificate based on the remaining
maturity thereof:
- Four (4) years to less than five (5) years -
5%; - Four (4) years to less than five (5) years - 5%;
- Three (3) years to less than (4) years - 12%; - Three (3) years to less than (4) years - 12%;
and and
- Less than three (3) years - 20%. - Less than three (3) years - 20%.

(2) Cash and/or Property Dividends. – A final (2) Cash and/or Property Dividends. – A final tax
tax at the following rates shall be imposed [at the following rates] AT THE RATE OF TEN
upon the cash and/or property dividends PERCENT (10%) shall be imposed upon the cash
actually or constructively received by an and/or property dividends actually or
individual from a domestic corporation or from constructively received by an individual from a
a joint stock company, insurance or mutual domestic corporation or from a joint stock
fund companies and regional operating company, insurance or mutual fund companies
headquarters of multinational companies, or and regional operating headquarters of
on the share of an individual in the multinational companies, or on the share of an
distributable net income after tax of a individual in the distributable net income after tax
partnership (except a general professional of a partnership (except a general professional
partnership) of which he is a partner, or on the partnership) of which he is a partner, or on the
share of an individual in the net income after share of an individual in the net income after tax
tax of an association, a joint account, or a joint of an association, a joint account, or a joint
venture or consortium taxable as a corporation venture or consortium taxable as a corporation of
of which he is a member or co-venturer: which he is a member or co-venturer[:

- Six percent (6%) beginning January 1, - Six percent (6%) beginning January 1, 1998;
1998;

Page 11 of 139
- Eight percent (8%) beginning January 1, - Eight percent (8%) beginning January 1, 1999;
1999;

-Ten percent (10%) beginning January 1, -Ten percent (10%) beginning January 1, 2000.
2000.
x x x]

(C) Capital Gains from Sale of Shares of (C) Capital Gains from Sale of Shares of Stock 3. Capital gains tax on sale
Stock not Traded in the Stock Exchange. – The not Traded in the Stock Exchange. – The of shares of stock –
provisions of Section 39(B) notwithstanding, a provisions of Section 39(B) notwithstanding, a Replaces the two-tiered rate
final tax at the rates prescribed below is final tax at the rate[s prescribed below] OF of 5% and 10% tax on the
hereby imposed upon the net capital gains FIFTEEN PERCENT (15%) is hereby imposed sale, transfer or exchange of
realized during the taxable year from the sale, upon the net capital gains realized during the shares of stock with a fixed
barter, exchange or other disposition of shares taxable year from the sale, barter, exchange or rate of 15%.
of stock in a domestic corporation, except other disposition of shares of stock in a domestic
shares sold, or disposed of through the stock corporation, except shares sold, or disposed of
exchange. through the stock exchange.

Not over P100,000……………………........ 5% [Not over P100,000……………………........ 5%


On any amount in excess of P100,000… 10% On any amount in excess of P100,000… 10%]

(D) Rates of Tax on Certain Passive Incomes. (D) Rates of Tax on Certain Passive Incomes. –

(1) Interest from Deposits and Yield or any (1) Interest from Deposits and Yield or any other
other Monetary Benefit from Deposit Monetary Benefit from Deposit Substitutes and
Substitutes and from Trust Funds and Similar from Trust Funds and Similar Arrangements, and
Arrangements, and Royalties. - A final tax at Royalties. - A final tax at the rate of twenty
the rate of twenty percent 27 (20%) is hereby percent 27 (20%) is hereby imposed upon the
imposed upon the amount of interest on amount of interest on currency bank deposit and
currency bank deposit and yield or any 28 yield or any 28 other monetary benefit from
other monetary benefit from deposit deposit substitutes and from trust funds and
substitutes and from trust funds and similar similar arrangements received by domestic
arrangements received by domestic corporations, and royalties, derived from sources
corporations, and royalties, derived from within the Philippines: Provided, however, That
sources within the Philippines: Provided, interest income derived by a domestic
however, That interest income derived by a corporation from a depository bank under the
domestic corporation from a depository bank expanded foreign currency deposit system shall
Page 12 of 139
under the expanded foreign currency deposit be subject to a final income tax at the rate of
system shall be subject to a final income tax [seven and one-half percent (7 1/2%)] FIFTEEN
at the rate of seven and one-half percent (7 PERCENT (15%) of such interest income.
1/2%) of such interest income.

(2) Capital Gains from the Sale of Shares of (2) Capital Gains from the Sale of Shares of
Stock Not Traded in the Stock Exchange. - A Stock Not Traded in the Stock Exchange. - A final
final tax at the rates prescribed below shall be tax at the rate[s prescribed below] OF FIFTEEN
imposed on net capital gains realized during PERCENT (15%) shall be imposed on net
the taxable year from the sale, exchange or capital gains realized during the taxable year
other disposition of shares of stock in a from the sale, exchange or other disposition of
domestic corporation except shares sold or shares of stock in a domestic corporation except
disposed of through the stock exchange: shares sold or disposed of through the stock
exchange.[:]
Not over P100,000 - 5%
Amount in excess of P100,000 - 10% [Not over P100,000 - 5%
Amount in excess of P100,000 - 10%]

10. Tax (C) Government-owned or -Controlled (C) Government-owned or –Controlled Excludes Philippine Charity
treatment of Corporations, Agencies or Instrumentalities. Corporations, Agencies or Instrumentalities. – Sweepstakes Office (PCSO)
government- – The provisions of existing special or general The provisions of existing special or general laws from the list of tax-exempt
owned and – laws to the contrary notwithstanding, all to the contrary notwithstanding, all corporations, government-owned or –
controlled corporations, agencies, or instrumentalities agencies, or instrumentalities owned or controlled controlled corporations,
corporations owned or controlled by the Government, by the Government, except the Government agencies or instrumentalities.
[Section 27(C)] except the Government Service Insurance Service Insurance System (GSIS), the Social
System (GSIS), the Social Security System Security System (SSS), the Philippine Health
(SSS), the Philippine Health Insurance Insurance Corporation (PHIC), AND the local
Corporation (PHIC), the local water districts water districts [and the Philippine Charity
(LWD) and the Philippine Charity Sweepstakes Office (PCSO)] shall pay such
Sweepstakes Office (PCSO), shall pay such rate of tax upon their taxable income as are
rate of tax upon their taxable income as are imposed by this Section upon corporations or
imposed by this Section upon corporations or associations engaged in a similar business,
associations engaged in a similar business, industry, or activity.
industry, or activity.

II. Filing of Tax Return and Payment of Tax

Page 13 of 139
Tax Code Present Provision TRAIN Amendment Reform Measure
Provision
1. Filing of (2) The following individuals shall (2) The following individuals shall not be
income tax not be required to file an income tax required to file an income tax return:
returns [Section return:
51(A)(2)]
(a) An individual whose gross (a) An individual whose [gross] TAXABLE 1. Exempts individual taxpayers whose taxable
income does not exceed his total income DOES NOT EXCEED TWO income does not exceed P250,000 from the
personal and additional exemptions HUNDRED FIFTY THOUSAND PESOS requirement to file income tax return.
for dependents under Section 35: (P250,000) [does not exceed his total
Provided, That a citizen of the personal and additional exemptions for
Philippines and any alien individual dependents] under Section [35]
engaged in business or practice of 24(A)(2)(A): Provided, That a citizen of
profession within the Philippines shall the Philippines and any alien individual
file an income tax return, regardless engaged in business or practice of
of the amount of gross income; profession within the Philippines shall file
an income tax return, regardless of the
amount of gross income;

(5) THE INCOME TAX RETURN (ITR) 2. Mandates that the individual income tax
SHALL CONSIST A MAXIMUM OF FOUR return shall consist only of four (4) pages and
(4) PAGES IN PAPER OR ELECTRONIC contain the personal profile; gross sales or
FORM, AND SHALL ONLY CONTAIN THE income from compensation or trade or
FOLLOWING INFORMATION: business, or exercise of profession; allowable
deductions; taxable income; and tax due and
(A) PERSONAL PROFILE AND payable of individual taxpayers.
INFORMATION;

(B) GROSS SALES RECEIPTS OR


INCOME FROM COMPENSATION
FOR SERVICES RENDERED,
CONDUCT OF TRADE OR BUSINESS
OR THE EXERCISE OF A
PROFESSION, EXCEPT INCOME
SUBJECT TO FINAL TAX AS
PROVIDED UNDER THIS CODE;

Page 14 of 139
(C) ALLOWABLE DEDUCTIONS UNDER
THIS CODE;

(D) TAXABLE INCOME AS DEFINED IN


SECTION 31 OF THIS CODE; AND

(E) INCOME TAX DUE AND PAYABLE.

xxx

SEC. 51-A. SUBSTITUTED FILING OF 3. Inserts a new provision which provides that
INCOME TAX RETURNS BY EMPLOYEES individual taxpayers receiving purely
RECEIVING PURELY COMPENSATION compensation income from only one employer
INCOME. - INDIVIDUAL TAXPAYERS whose income tax has been correctly been
RECEIVING PURELY COMPENSATION withheld by their employer shall not be
INCOME, REGARDLESS OF AMOUNT, required to file an income tax return.
FROM ONLY ONE EMPLOYER IN THE
PHILIPPINES FOR THE CALENDAR
YEAR, THE INCOME TAX OF WHICH
HAS BEEN WITHHELD CORRECTLY BY
THE SAID EMPLOYER (TAX DUE
EQUALS TAX WITHHELD) SHALL NOT
BE REQUIRED TO FILE AN ANNUAL
INCOME TAX RETURN. THE
CERTIFICATE OF WITHHOLDING FILED
BY THE RESPECTIVE EMPLOYERS,
DULY STAMPED "RECEIVED" BY THE
BIR, SHALL BE TANTAMOUNT TO THE
SUBSTITUTED FILING OF INCOME TAX
RETURNS BY SAID EMPLOYEES.

SEC. 52. Corporation Returns. –

(A) Requirements. - Every corporation 4. Mandates that the corporate income tax
subject to the tax herein imposed, except return shall consist a maximum of four (4)
foreign corporations not engaged in trade pages and shall contain the corporate profile;
or business in the Philippines, shall render, gross sales or income from services or conduct
in duplicate, a true and accurate quarterly of trade or business; allowable deductions;
Page 15 of 139
income tax return and final or adjustment taxable income; and income tax due and
return in accordance with the provisions of payable of corporations.
Chapter XII of this Title. The INCOME TAX
return shall CONSIST A MAXIMUM OF
FOUR (4) PAGES IN PAPER FORM OR
ELECTRONIC FORM, be filed by the
president, vice-president or other 1
principal officer, [and] shall be sworn to by
such officer and by the treasurer or
assistant treasurer, AND SHALL ONLY
CONTAIN THE FOLLOWING
INFORMATION:

(1) CORPORATE PROFILE AND


INFORMATION;

(2) GROSS SALES RECEIPTS OR


INCOME FROM SERVICES RENDERED,
OR CONDUCT OF TRADE OR BUSINESS,
EXCEPT INCOME SUBJECT TO FINAL
TAX AS PROVIDED UNDER THIS CODE;

(3) ALLOWABLE DEDUCTIONS UNDER


THIS CODE;

(4) TAXABLE INCOME AS DEFINED IN


SECTION 31 OF THIS CODE; AND

(5) INCOME TAX DUE AND PAYABLE.

PROVIDED, THAT THE FOREGOING


PROVISIONS SHALL NOT AFFECT THE
IMPLEMENTATION OF REPUBLIC ACT
NO. 10708 OR TIMTA.
2. Range of (B) Withholding of Creditable (B) Withholding of Creditable Tax at Limits the rate of withholding tax that the
creditable tax Tax at Source. – The Secretary of Source. – The Secretary of Finance may, Secretary of Finance may impose on the
that the Finance may, upon the upon the recommendation of the income payable to natural or juridical persons
Secretary of recommendation of the Commissioner, require the withholding of a from 1%- 32% to 1%-15%.
Page 16 of 139
Finance may Commissioner, require the tax on the items of income payable to
impose on withholding of a tax on the items of natural or juridical persons, residing in the
income received income payable to natural or juridical Philippines, by payor-corporation/persons
by taxpayers persons, residing in the Philippines, as provided by law, at the rate of not less
[Section 57(B)] by payor-corporation/persons as than one percent (1%) but not more than
provided for by law, at the rate of thirty-two (32%) thereof, which shall be
not less than one percent (1%) but credited against the income tax liability of
not more than thirty-two percent the taxpayer for the taxable year:
(32%) thereof, which shall be PROVIDED, THAT, BEGINNING
credited against the income tax JANUARY 1, 2019, THE RATE OF
liability of the taxpayer for the WITHHOLDING SHALL NOT BE LESS
taxable year. THAN ONE PERCENT (1%) BUT NOT
MORE THAN FIFTEEN PERCENT (15%)
OF THE INCOME PAYMENT.
3. Filing and The return for final withholding tax The return for final [withholding tax shall Removes the provision which requires the filing
payment of final shall be filed and the payment made be filed and the payment made within and payment of final withholding tax within 25
and creditable within twenty-five (25) days from twenty-five (25) days from the close each days from the close of calendar quarter, and
withholding tax the close of each calendar quarter, calendar quarter, while the return for] filing and payment of creditable withholding
return [Section while the return for creditable AND creditable withholding taxes shall be tax not later than the last day of the month
58(A)] withholding taxes shall be filed and filed and the payment made not later than following the close of quarter.
the payment made not later than the the last day of the month following the
last day of the month following the close of the quarter during which the
close of the quarter during which withholding was made [: Provided, That
withholding was made: Provided, the Commissioner, with the approval of the
That the Commissioner, with the Secretary of Finance, may require these
approval of the Secretary of Finance, withholding agents to pay or deposit the
may require these withholding taxes deducted or withheld at more
agents to pay or deposit the taxes frequent intervals when necessary to
deducted or withheld at more protect the interest of the government].
frequent intervals when necessary to
protect the interest of the
government.
4. Filing of SEC. 74. Declaration of Income SEC. 74. Declaration of Income Tax for Moves the date of filing the first quarter tax
quarterly income Tax for Individuals. – Individuals. – return for individual taxpayers engaged in
tax return for business or practice of profession from 15 April
individual (A) In General. – Except as otherwise (A) In General. – Except as otherwise to 15 May of each year.
taxpayers provided in this Section, every provided in this Section, every individual
[Section 74] individual subject to income tax subject to income tax under Sections 24
Page 17 of 139
under Sections 24 and 25(A) of this and 25(A) of this Title, who is receiving
Title, who is receiving self- self-employment income, whether it
employment income, whether it constitutes the sole source of his income or
constitutes the sole source of his in combination with salaries, wages, and
income or in combination with other fixed or determinable income, shall
salaries, wages and other fixed or make and file a declaration of his
determinable income, shall make estimated income for the current taxable
and file a declaration of his year on or before [April] MAY 15 of the
estimated income for the current same taxable year.
taxable year on or before April 15 of
the same taxable year.

(B) Return and Payment of (B) Return and Payment of Estimated


Estimated Income Tax by Income Tax by Individuals. – The amount
Individuals. – The amount of estimated income as defined in Subsection
estimated income as defined in (C) with respect to which a declaration is
Subsection (C) with respect to which required under Subsection (A) shall be
a declaration is required under paid in four (4) installments. The first
Subsection (A) shall be paid in four installment shall be paid at the time of
(4) installments. The first installment declaration and the second and third shall
shall be paid at the time of the be paid on August 15 and November 15 of
declaration and the second and third the current year, respectively. The fourth
shall be paid on August 15 and installment shall be paid on or before
November 15 of the current year, [April] MAY 15 of the following calendar
respectively. The fourth installment year when the final adjusted income tax
shall be paid on or before April 15 of return is due to be filed.
the following calendar year when the
final adjusted income tax return is
due to be filed.
5. Due date for (2) Installment Payment. – When (2) Installment of Payment. – When a tax Moves the due date for paying the second
paying second the tax due is in excess of Two due is in excess of Two thousand pesos installment from 15 July to 15 October in case
installment of thousand pesos (P2,000), the (P2,000.00), the taxpayer other than a of individual taxpayers with tax due in excess
individual taxpayer other than a corporation corporation, may elect to pay the tax in of P2,000 and availing of the option to pay
taxpayers may elect to pay the tax in two (2) two equal installments, in which case, the their tax due in two equal installments.
availing of option equal installments in which case, the first installment shall be paid at the time of
to pay tax due in first installment shall be paid at the the return is filed and the second
two equal time the return is filed and the installment on or before [July] OCTOBER
installments second installment, on or before July 15 following the close of the calendar year,
Page 18 of 139
[Section 15 following the close of the calendar if any installment is not paid on or before
56(A)(2)] year. If any installment is not paid the date fixed for its payment, the whole
on or before the date fixed for its amount of the tax unpaid becomes due
payment, the whole amount of the and payable together with the delinquency
tax unpaid becomes due and penalties.
payable, together with the
delinquency penalties

Page 19 of 139
III. Estate Tax
Tax Code Present Provision TRAIN Amendment Reform Measure
Provision
1. Estate Tax SEC. 84. Rates of Estate Tax. – There SEC. 84. Rate[s] of Estate Tax. – There Replaces the current graduated estate tax
Rate shall be levied, assessed, collected and shall be levied, assessed, collected and rates with a fixed estate tax rate of six
[Section 84] paid upon the transfer of the net estate paid upon the transfer of the net estate percent based on the value of net estate.
as determined in accordance with as determined in accordance with
Sections 85 and 86 of every decedent, Sections 85 and 86 of every decedent,
whether resident or nonresident of the whether resident or nonresident of the
Philippines, a tax based on the value of Philippines, a tax AT THE RATE OF SIX
such net estate, as computed in PERCENT (6%) based on the value of
accordance with the following schedule: such net estate[, as computed in
accordance with the following schedule:].
If the net estate is:
Over But The Tax Plus Of the
Not Over Shall Be Excess
Over

P Exempt
200,000

P 200,000 500,000 0 5% P 200,000

500,000 2,000,000 P 15,000 8% 500,000

2,000,000 5,000,000 135,000 11% 2,000,000

5,000,000 10,000,000 465,000 15% 5,000,000

10,000,000 And Over 1,215,000 20% 10,000,000

2. Deductions SEC. 86. Computation of Net Estate. – SEC. 86. Computation of Net Estate. –
allowed to the For the purpose of the tax imposed in For the purpose of the tax imposed in
Estate [Section this Chapter, the value of the net estate this Chapter, the value of the net estate
86] shall be determined: shall be determined:

(A) Deductions Allowed to the Estate of a (A) Deductions Allowed to the Estate of a
Citizen or a Resident. – In the case of a Citizen or a Resident. – In the case of a
citizen or resident of the Philippines, by citizen or resident of the Philippines, by
deducting from the value of the gross deducting from the value of the gross
estate – estate –

Page 20 of 139
(1) Expenses, Losses, Indebtedness, and [(1) Expenses, Losses, Indebtedness, 1. Removes the deduction for funeral
Taxes. – Such amounts – and Taxes. - Such amounts – expenses, judicial expenses, family home,
and medical expenses incurred by decedent
(a) For actual funeral expenses or in an (a) For actual funeral expenses or in an in arriving at the net estate subject to
amount equal to five percent (5%) of the amount equal to five percent (5%) of the estate tax.
gross estate, whichever is lower, but in gross estate, whichever is lower, but in
no case to exceed Two hundred thousand no case to exceed Two hundred thousand
pesos (P200,000); pesos (P200,000);

(b) For judicial expenses of the (b) For judicial expenses of the
testamentary or intestate proceedings; testamentary or intestate proceedings;]

(1) STANDARD DEDUCTION. - AN 2. Increases the standard deduction from P1


AMOUNT EQUIVALENT TO FIVE Million to P5 Million.
MILLION PESOS (P5,000,000).

(c) For claims against the estate: ([c] 2) For claims against the estate:
Provided, That at the time the Provided, That at the time the
indebtedness was incurred the debt indebtedness was incurred the debt 18
instrument was duly notarized and, if the instrument was duly notarized and, if the
loan was contracted within three (3) loan was contracted within three (3)
years before the death of the decedent, years before the death of the decedent,
the administrator or executor shall the administrator or executor shall
submit a statement showing the submit a statement showing the
disposition of the proceeds of the loan; disposition of the proceeds of the
loan[;].

(d) For claims of the deceased against ([d] 3) For claims of the deceased
insolvent persons where the value of against insolvent persons where the
decedent's interest therein is included in value of decedent's interest therein is
the value of the gross estate; and included in the value of the gross
estate[; and].

(e) For unpaid mortgages upon, or any ([e] 4) For unpaid mortgages upon, or
indebtedness in respect to, property any indebtedness in respect to, property
where the value of decedent's interest where the value of decedent's interest
therein, undiminished by such mortgage therein, undiminished by such mortgage
or indebtedness, is included in the value or indebtedness, is included in the value
Page 21 of 139
of the gross estate, but not including any of the gross estate, but not including any
income tax upon income received after income tax upon income received after
the death of the decedent, or property the death of the decedent, or property
taxes not accrued before his death, or taxes not accrued before his death, or
any estate tax. The deduction herein any estate tax. The deduction herein
allowed in the case of claims against the allowed in the case of claims against the
estate, unpaid mortgages or any estate, unpaid mortgages or any
indebtedness shall, when founded upon a indebtedness shall, when founded upon a
promise or agreement, be limited to the promise or agreement, be limited to the
extent that they were contracted bona extent that they were contracted bona
fide and for an adequate and full fide and for an adequate and full
consideration in money or money's consideration in money or money's
worth. There shall also be deducted worth. There shall also be deducted
losses incurred during the settlement of losses incurred during the settlement of
the estate arising from fires, storms, the estate arising from fires, storms,
shipwreck, or other casualties, or from shipwreck, or other casualties, or from
robbery, theft or embezzlement, when robbery, theft or embezzlement, when
such losses are not compensated for by such losses are not compensated for by
insurance or otherwise, and if at the time insurance or otherwise, and if at the time
of the filing of the return such losses of the filing of the return such losses
have not been claimed as a deduction for have not been claimed as a deduction for
income tax purposes in an income tax the income tax purposes in an income
return, and provided that such losses tax return, and provided that such losses
were incurred not later than the last day were incurred not later than the last day
for the payment of the estate tax as for the payment of the estate tax as
prescribed in Subsection (A) of Section prescribed in Subsection (A) of Section
91. 91.

(2) Property Previously Taxed. – An ([2] 5) Property Previously Taxed. – An


amount equal to the value specified amount equal to the value specified
below of any property forming a part of below of any property forming part of the
the gross estate situated in the gross estate situated in the Philippines of
Philippines of any person who died within any person who died within five (5) years
five (5) years prior to the death of the prior to the death of the decedent, or
decedent, or transferred to the decedent transferred to the decedent by gift within
by gift within five (5) years prior to his five (5) years prior to his death, where
death, where such property can be such property can be identified as having
identified as having been received by the been received by the decedent from the
Page 22 of 139
decedent from the donor by gift, or from donor by gift, or from such prior
such prior decedent by gift, bequest, decedent by gift, bequest, devise or
devise or inheritance, or which can be inheritance, or which can be identified as
identified as having been acquired in having been acquired in exchange for
exchange for property so received: property so received:

One hundred percent (100%) of the One hundred percent (100%) of the
value, if the prior decedent died within value, if the prior decedent died within
one (1) year prior to the death of the one (1) year prior to the death of the
decedent, or if the property was decedent, or if the property was
transferred to him by gift within the transferred to him by gift, within the
same period prior to his death; same period prior to his death;

Eighty percent (80%) of the value, if the Eighty percent (80%) of the value, if the
prior decedent died more than one (1) prior decedent died more than one (1)
year but not more than two (2) years year but not more than two (2) years
prior to the death of the decedent, or if prior to the death of the decedent, or if
the property was transferred to him by the property was transferred to him by
gift within the same period prior to his gift within the same period prior to his
death; death;

Sixty percent (60%) of the value, if the Sixty percent (60%) of the value, if the
prior decedent died more than two (2) prior decedent died more than two (2)
years but not more than three (3) years years but not more than three (3) years
prior to the death of the decedent, or if prior to the death of the decedent, or if
the property was transferred to him by the property was transferred to him by
gift within the same period prior to his gift within the same period prior to his
death; death;

Forty percent (40%) of the value, if the Forty percent (40%) of the value, if the
prior decedent died more than three (3) prior decedent died more than three (3)
years but not more than four (4) years years but not more than four (4) years
prior to the death of the decedent, or if prior to the death of the decedent, or if
the property was transferred to him by the property was transferred to him by
gift within the same period prior to his gift within the same period prior to his
death; and death; and

Page 23 of 139
Twenty percent (20%) of the value, if Twenty percent (20%) of the value, if the
the prior decedent died more than four prior decedent died more than four (4)
(4) years but not more than five (5) years but not more than five (5) years
years prior to the death of the decedent, prior to the death of the decedent, or if
or if the property was transferred to him the property was transferred to him by
by gift within the same period prior to his gift within the same period prior to his
death. death.

These deductions shall be allowed only These deductions shall be allowed only
where a donor's tax or estate tax where a donor’s tax, or estate tax
imposed under this Title was finally imposed under this Title was finally
determined and paid by or on behalf of determined and paid by or on behalf of
such donor, or the estate of such prior such donor, or the estate of such prior
decedent, as the case may be, and only decedent, as the case may be, and only
in the amount finally determined as the in the amount finally determined as the
value of such property in determining the value of such property in determining the
value of the gift, or the gross estate of value of the gift, or the gross estate of
such prior decedent, and only to the such prior decedent, and only to the
extent that the value of such property is extent that the value of such property is
included in the decedent's gross estate, included in the decedent’s gross estate,
and only if in determining the value of and only if in determining the value of
the estate of the prior decedent, no the estate of the prior decedent, no
deduction was allowable under paragraph deduction was allowable under paragraph
(2) in respect of the property or (2) in respect of the property or
properties given in exchange therefor. properties given in exchange therefor.
Where a deduction was allowed of any Where a deduction was allowed of any
mortgage or other lien in determining the mortgage or other lien in determining the
donor's tax, or the estate tax of the prior donor’s tax, or the estate tax of the prior
decedent, which was paid in whole or in decedent, which was paid in whole or in
part prior to the decedent's death, then part prior to the decedent’s death, then
the deduction allowable under said the deduction allowable under said
Subsection shall be reduced by the Subsection shall be reduced by the
amount so paid. Such deduction amount so paid. Such deduction
allowable shall be reduced by an amount allowable shall be reduced by an amount
which bears the same ratio to the which bears the same ratio to the
amounts allowed as deductions under amounts allowed as deductions under
paragraphs (1) and (3) of this paragraph[s (1) and] (3) of this
Subsection as the amount otherwise Subsection as the amount otherwise
Page 24 of 139
deductible under said paragraph (2) deductible under said paragraph (2)
bears to the value of the decedent's bears to the value of the decedent’s
estate. Where the property referred to estate. Where the property referred to
consists of two or more items, the consists of two or more items, the
aggregate value of such items shall be aggregate value of such items shall be
used for the purpose of computing the used for the purpose of computing the
deduction. deduction.

(3) Transfers for Public Use. – The ([3] 6) Transfers for Public Use. – The
amount of all the bequests, legacies, amount of all bequests, legacies, devises
devises or transfers to or for the use of or transfers to or for the use of the
the Government of the Republic of the Government of the Republic of the
Philippines, or any political subdivision Philippines or any political subdivision
thereof, for exclusively public purposes. thereof, for exclusively public purposes.

(4) The Family Home. – An amount ([4] 7) The Family Home. - An amount 3. Increases the fair market value of family
equivalent to the current fair market equivalent to the current fair market home which is exempt from estate tax from
value of the decedent's family home: value of the decedent's family home: P1M to P10M.
Provided, however, That if the said Provided, however, That if the said
current fair market value exceeds One current fair market value exceeds [One]
million pesos (P1,000,000), the excess TEN million pesos [(P1,000,000)]
shall be subject to estate tax. As a sine (P10,000,000), the excess shall be
qua non condition for the exemption or subject to estate tax. [As a sine qua non 4. Deletes the provision requiring the
deduction, said family home must have condition for the exemption or deduction, certification from the barangay captain for
been the decedent's family home as said family home must have been the decedent’s home to be considered as a
certified by the barangay captain of the decedent's family home as certified by family home for estate tax purposes.
locality. the barangay captain of the locality.]

(5) Standard Deduction. – An amount [(5) Standard Deduction. - An amount


equivalent to One million pesos equivalent to One million pesos (P1,
(P1,000,000). 000,000).]

(6) Medical Expenses. – Medical [(6) Medical Expenses. - Medical


expenses incurred by the decedent Expenses incurred by the decedent within
within one (1) year prior to his death one (1) year prior to his death which
which shall be duly substantiated with shall be duly substantiated with receipts:
receipts: Provided, That in no case shall Provided, That in no case shall the
the deductible medical expenses exceed
Page 25 of 139
Five hundred thousand pesos deductible medical expenses exceed Five
(P500,000). Hundred Thousand Pesos (P500,000).]

(7) Amount Received by Heirs under ([7] 8) Amount Received by Heirs Under
Republic Act No. 4917. – Any amount Republic Act No. 4917. - Any amount
received by the heirs from the decedent’s received by the heirs from the decedent’s
employer as a consequence of the death employee as a consequence of the death
of the decedent-employee in accordance of the decedent-employee in accordance
with Republic Act No. 4917: Provided, with Republic Act No. 4917: Provided,
That such amount is included in the That such amount is included in the gross
gross estate of the decedent. estate of the decedent.

(B) Deductions Allowed to Nonresident (B) Deductions Allowed to Nonresident


Estates. – In the case of a nonresident Estates. – In the case of a nonresident
not a citizen of the Philippines, by not a citizen of the Philippines, by
deducting from the value of that part of deducting from the value of that part of
his gross estate which at the time of his his gross estate which at the time of his
death is situated in the Philippines: death is situated in the Philippines:

(1) Expenses, Losses, Indebtedness and [(1) Expenses, Losses, Indebtedness and
Taxes. – That proportion of the Taxes. – That proportion of the
deductions specified in paragraph (1) of deductions specified in paragraph (1) of
Subsection (A) of this Section which the Subsection (A) of this Section which the
value of such part bears to the value of value of such part bears to the value of
his entire gross estate wherever his entire gross estate wherever
situated; situated;]

(1) STANDARD DEDUCTION. - AN 5. Introduces a standard deduction of


AMOUNT EQUIVALENT TO FIVE P500,000 against the gross estate of
HUNDRED THOUSAND PESOS nonresidents.
(P500,000).

(2) THAT PROPORTION OF THE


DEDUCTIONS SPECIFIED IN
PARAGRAPHS (2), (3), AND (4) OF
SUBSECTION (A) OF THIS SECTION
WHICH THE VALUE OF SUCH PART
BEARS TO THE VALUE OF HIS ENTIRE
Page 26 of 139
GROSS ESTATE WHEREVER
SITUATED;

(2) Property Previously Taxed. – An [(2)] (3) Property Previously Taxed. – An


amount equal to the value specified amount equal to the value specified
below of any property forming part of the below of any property forming part of the
gross estate situated in the Philippines of gross estate situated in the Philippines of
any person who died within five (5) years any person who died within five (5) years
prior to the death of the decedent, or prior to the death of the decedent, or
transferred to the decedent by gift within transferred to the decedent by gift within
five (5) years prior to his death, where five (5) years prior to his death, where
such property can be identified as having such property can be identified as having
been received by the decedent from the been received by the decedent from the
donor by gift, or from such prior donor by gift, or from such prior
decedent by gift, bequest, devise or decedent by gift, bequest, devise or
inheritance, or which can be identified as inheritance, or which can be identified as
having been acquired in exchange for having been acquired in exchange for
property so received: property so received:

One hundred percent (100%) of the One hundred percent (100%) of the
value, if the prior decedent died within value, if the prior decedent died within
one (1) year prior to the death of the one (1) year prior to the death of the
decedent, or if the property was decedent, or if the property was
transferred to him by gift, within the transferred to him by gift, within the
same period prior to his death; same period prior to his death;

Eighty percent (80%) of the value, if Eighty percent (80%) of the value, if
the prior decedent died more than one the prior decedent died more than one
(1) year but not more than two (2) years (1) year but not more than two (2) years
prior to the death of the decedent, or if prior to the death of the decedent, or if
the property was transferred to him by the property was transferred to him by
gift within the same period prior to his gift within the same period prior to his
death; death;

Sixty percent (60%) of the value, if Sixty percent (60%) of the value, if
the prior decedent died more than two the prior decedent died more than two
(2) years but not more than three (3) (2) years but not more than three (3)
years prior to the death of the decedent, years prior to the death of the decedent,
Page 27 of 139
or if the property was transferred to him or if the property was transferred to him
by gift within the same period prior to his by gift within the same period prior to his
death; death;

Forty percent (40%) of the value, if Forty percent (40%) of the value, if
the prior decedent died more than three the prior decedent died more than three
(3) years but not more than four (4) (3) years but not more than four (4)
years prior to the death of the decedent, years prior to the death of the decedent,
or if the property was transferred to him or if the property was transferred to him
by gift within the same period prior to his by gift within the same period prior to his
death; and death; and

Twenty percent (20%) of the value, if Twenty percent (20%) of the value, if
the prior decedent died more than four the prior decedent died more than four
(4) years but not more than five (5) (4) years but not more than five (5)
years prior to the death of the decedent, years prior to the death of the decedent,
or if the property was transferred to him or if the property was transferred to him
by gift within the same period prior to his by gift within the same period prior to his
death. death.

These deductions shall be allowed These deductions shall be allowed only


only where a donor's tax, or estate tax where a donor's tax, or estate tax
imposed under this Title is finally imposed under this Title is finally
determined and paid by or on behalf of determined and paid by or on behalf of
such donor, or the estate of such prior such donor, or the estate of such prior
decedent, as the case may be, and only decedent, as the case may be, and only
in the amount finally determined as the in the amount finally determined as the
value of such property in determining the value of such property in determining the
value of the gift, or the gross estate of value of the gift, or the gross estate of
such prior decedent, and only to the such prior decedent, and only to the
extent that the value of such property is extent that the value of such property is
included in that part of the decedent's included in that part of the decedent's
gross estate which at the time of his gross estate which at the time of his
death is situated in the Philippines; and death is situated in the Philippines; and
only if, in determining the value of the only if, in determining the value of the
net estate of the prior decedent, no net estate of the prior decedent, no
deduction is allowable under paragraph deduction is allowable under paragraph
(2) of Subsection (B) of this Section, in (2) of Subsection (B) of this Section, in
Page 28 of 139
respect of the property or properties respect of the property or properties
given in exchange therefor. Where a given in exchange therefor. Where a
deduction was allowed of any mortgage deduction was allowed of any mortgage
or other lien in determining the donor's or other lien in determining the donor's
tax, or the estate tax of the prior tax, or the estate tax of the prior
decedent, which was paid in whole or in decedent, which was paid in whole or in
part prior to the decedent's death, then part prior to the decedent's death, then
the deduction allowable under said the deduction allowable under said
paragraph shall be reduced by the paragraph shall be reduced by the
amount so paid. Such deduction amount so paid. Such deduction
allowable shall be reduced by an amount allowable shall be reduced by an amount
which bears the same ratio to the which bears the same ratio to the
amounts allowed as deductions under amounts allowed as deductions under
paragraphs (1) and (3) of this paragraphs (1) and (3) of this Subsection
Subsection as the amount otherwise as the amount otherwise deductible
deductible under paragraph (2) bears to under paragraph (2) bears to the value
the value of that part of the decedent's of that part of the decedent's gross
gross estate which at the time of his estate which at the time of his death is
death is situated in the Philippines. situated in the Philippines. Where the
Where the property referred to consists property referred to consists of two (2)
of two (2) or more items, the aggregate or more items, the aggregate value of
value of such items shall be used for the such items shall be used for the purpose
purpose of computing the deduction. of computing the deduction.

(3) Transfers for Public Use. – The [(3)] (4) Transfers for Public Use. – The
amount of all bequests, legacies, devises amount of all bequests, legacies, devises
or transfers to or for the use of the or transfers to or for the use of the
Government of the Republic of the Government of the Republic of the
Philippines or any political subdivision Philippines or any political subdivision
thereof, for exclusively public purposes. thereof, for exclusively public purposes.

(C) Share in the Conjugal Property. – (C) Share in the Conjugal Property. – The
The net share of the surviving spouse in net share of the surviving spouse in the
the conjugal partnership property as conjugal partnership property as
diminished by the obligations properly diminished by the obligations properly
chargeable to such property shall, for the chargeable to such property shall, for the
purpose of this Section, be deducted purpose of this Section, be deducted
from the net estate of the decedent. from the net estate of the decedent.
Page 29 of 139
(D) Miscellaneous Provisions. – No [“(D) Miscellaneous Provisions. – No 6. Deletes the provision which allows
deduction shall be allowed in the case of deduction shall be allowed in the case of deductions to be made against the gross
a nonresident not a citizen of the a nonresident not a citizen of the estate of nonresident under the condition
Philippines, unless the executor, Philippines, unless the executor, that the executor, administrator or heirs
administrator, or anyone of the heirs, as administrator, or anyone of the heirs, as includes in the estate tax return the value of
the case may be, includes in the return the case may be, includes in the return the gross estate of the nonresident which
required to be filed under Section 90 the required to be filed under Section 90 the are situated abroad.
value at the time of his death of that part value at the time of his death of that part
of the gross estate of the nonresident not of the gross estate of the nonresident not
situated in the Philippines. situated in the Philippines.]

(E) Tax Credit for Estate Taxes Paid to a ([E] D) Tax Credit for Estate Taxes Paid
Foreign Country. – to a Foreign Country. –

(1) In General. – The tax imposed by (1) In General. – The tax imposed by this
this Title shall be credited with the Title shall be credited with the amounts
amounts of any estate tax imposed by the of any estate tax imposed by the
authority of a foreign country. authority of a foreign country.

(2) Limitations on Credit. – The (2) Limitations on Credit. – The amount of


amount of the credit taken under this the credit taken under this Section shall
Section shall be subject to each of the be subject to each of the following
following limitations: limitations:

(a) The amount of the credit in (a) The amount of the credit in respect
respect to the tax paid to any country to the tax paid to any country shall not
shall not exceed the same proportion of exceed the same proportion of the tax
the tax against which such credit is against which such credit is taken, which
taken, which the decedent's net estate the decedent's net estate situated within
situated within such country taxable such country taxable under this Title
under this Title bears to his entire net bears to his entire net estate; and
estate; and

(b) The total amount of the credit (b) The total amount of the credit shall
shall not exceed the same proportion of not exceed the same proportion of the
the tax against which such credit is tax against which such credit is taken,
taken, which the decedent's net estate which the decedent's net estate situated
Page 30 of 139
situated outside the Philippines taxable outside the Philippines taxable under this
under this Title bears to his entire net Title bears to his entire net estate.
estate.
3. Filing of SEC. 90. Estate Tax Returns. – SEC. 90. Estate Tax Returns. –
estate tax return
and payment of (A) Requirements. – In all cases of (A) Requirements. –In all cases of 1. Eliminates the requirement to file an
tax [Section 90 transfers subject to the tax imposed transfers subject to the tax imposed estate tax return for gross estate exceeding
and 91] herein, or where, though exempt from herein, [or where, though exempt from P200,000 which are exempt from estate tax.
tax, the gross value of the estate tax, the gross value of the estate
exceeds Two hundred thousand pesos exceeds Two hundred thousand pesos
(P200,000), or regardless of the gross (P200,000),] or regardless of the gross
value of the estate, where the said value of the estate, where the said estate
estate consists of registered or consists of registered or registrable
registrable property such as real property such as real property, motor
property, motor vehicle, shares of stock vehicle, shares of stock or other similar
or other similar property for which a property for which a clearance from the
clearance from the Bureau of Internal Bureau of Internal Revenue is required as
Revenue is required as a condition a condition precedent for the transfer of
precedent for the transfer of ownership ownership thereof in the name of the
thereof in the name of the transferee, transferee, the executor, or the
the executor, or the administrator, or administrator, or any of the legal heirs,
any of the legal heirs, as the case may as the case may be, shall file a return
be, shall file a return under oath in under oath in duplicate, setting forth:
duplicate, setting forth:

(1) The value of the gross estate of the (1) The value of the gross estate of the
decedent at the time of his death, or in decedent at the time of his death, or in
case of a nonresident, not a citizen of the case of a nonresident, not a citizen of the
Philippines, of that part of his gross Philippines, of that part of his gross
estate situated in the Philippines; estate situated in the Philippines;

(2) The deductions allowed from gross (2) The deductions allowed from gross
estate in determining the estate as estate in determining the estate as
defined in Section 86; and defined in Section 86; and

(3) Such part of such information as may (3) Such part of such information as may
at the time be ascertainable and such at the time be ascertainable and such

Page 31 of 139
supplemental data as may be necessary supplemental data as may be necessary
to establish the correct taxes. to establish the correct taxes.

Provided, however, That estate tax Provided, however, That estate tax 2. Increases the threshold value of estate
returns showing a gross value exceeding returns showing a gross value exceeding from P2 Million to P5 Million where the estate
Two million pesos (P2,000,000) shall be [Two] FIVE million pesos [(P2,000,000)] tax return to be filed should be supported by
supported with a statement duly certified (P5,000,000) shall be supported with a a statement duly certified by a certified
to by a Certified Public Accountant statement duly certified to by a Certified public accountant (CPA).
containing the following: Public Accountant containing the
following:
xxx
xxx

(B) Time for Filing. – For the purpose of (B) Time for Filing. - For the purpose of 3. Extends the period to file estate tax return
determining the estate tax provided for in determining the estate tax provided for from six months to one year.
Section 84 of this Code, the estate tax in Section 84 of this Code, the estate tax
return required under the preceding return required under the preceding
Subsection (A) shall be filed within six (6) Subsection (A) shall be filed within [six
months from the decedent's death. (6) months] ONE (1) YEAR from the
decedent's death.

SEC. 91. Payment of Tax. – SEC. 91. Payment of Tax. –

(C) PAYMENT BY INSTALLMENT. – IN 4. Adds a provision which allows payment


CASE THE AVAILABLE CASH OF THE by installment of estate tax due within two
ESTATE IS INSUFFICIENT TO PAY years from statutory date for payment of tax
THE TOTAL ESTATE TAX DUE, in case the cash of the estate is insufficient
PAYMENT BY INSTALLMENT SHALL to pay the total estate tax due.
BE ALLOWED WITHIN TWO (2)
YEARS FROM THE STATUTORY DATE
FOR ITS PAYMENT WITHOUT CIVIL
PENALTY AND INTEREST.
4. Withdrawal of SEC. 97. Payment of Tax Antecedent to SEC. 97. Payment of Tax Antecedent to Relaxes the rule on the amount which can
bank deposits of the Transfer of Shares, Bonds or Rights. the Transfer of Shares, Bonds or Rights. be withdrawn from the deceased’s bank
the deceased – x x x. – x x x. deposits. Banks to allow withdrawal of
[Section 97] deceased’s bank deposits subject to 6%
If a bank has knowledge of the death of If a bank has knowledge of the death of a final withholding tax.
a person, who maintained a bank deposit person, who maintained a bank deposit
Page 32 of 139
account alone, or jointly with another, it account alone, or jointly with another, it
shall not allow any withdrawal from the shall [not] allow any withdrawal from the
said deposit account, unless the said deposit account, SUBJECT TO A
Commissioner has certified that the FINAL WITHHOLDING TAX OF SIX
taxes imposed thereon by this Title have PERCENT (6%) [unless the
been paid; Provided, however, That the Commissioner has certified that the taxes
administrator of the estate or any one imposed thereon by this Title have been
(1) of the heirs of the decedent may, paid: Provided, however, That the
upon authorization by the Commissioner, administrator of the estate or any one
withdraw an amount not exceeding (1) of the heirs of the decedent may,
Twenty thousand pesos (P20,000) upon authorization by the Commissioner,
without the said certification. For this withdraw an amount not exceeding
purpose, all withdrawal slips shall contain Twenty thousand pesos (P20,000)
a statement to the effect that all of the without the said certification.] For this
joint depositors are still living at the time purpose, all withdrawal slips shall contain
of withdrawal by any one of the joint a statement to the effect that all of the
depositors and such statement shall be joint depositors are still living at the time
under oath by the said depositors. of withdrawal by any one of the joint
depositors and such statement shall be
under oath by the said depositors.

Page 33 of 139
IV. Donor’s Tax
Tax Code Present Provision TRAIN Amendment Reform Measure
Provision
1. Donor’s tax SEC. 99. Rates of Tax Payable by Donor. – SEC. 99. Rate[s] of Tax Payable by Donor. Imposes a uniform 6% donor’s tax, in
rate, [Section – lieu of the graduated estate tax rates
99] and 30% donor’s tax on donations
(A) In General. – The tax for each calendar year (A) In General. – The tax for each calendar made to strangers. The 6% donor’s
shall be computed on the basis of the total net year shall be SIX PERCENT (6%) tax shall be based on total gifts in
gifts made during the calendar year in computed on the basis of the total [net] excess of P250,000 exempt gifts.
accordance with the following schedule: gifts IN EXCESS OF TWO HUNDRED
FIFTY THOUSAND PESOS (P250,000)
If the net gift is: EXEMPT GIFT made during the calendar
year. [in accordance with the following
Over But Not The Tax Plus Of the schedule:]
Over Shall Be Excess
Over

P 100,000 Exempt

P 100,000 200,000 0 2% P100,000

200,000 500,000 2,000 4% 200,000

500,000 1,000,000 14,000 6% 500,000

1,000,000 3,000,000 44,000 8% 1,000,000

3,000,000 5,000,000 204,000 10% 3,000,000

5,000,000 10,000,000 404,000 12% 5,000,000

10,000,000 1,004,000 15% 10,000,000

(B) Tax Payable by Donor if Donee is a [(B) Tax Payable by Donor if Donee is a
Stranger. – When the donee or beneficiary is a Stranger. – When the donee or beneficiary
stranger, the tax payable by the donor shall be is a stranger, the tax payable by the donor
thirty percent (30%) of the net gifts. For the shall be thirty percent (30%) of the net
purpose of this tax, a ‘stranger’ is a person gifts. For the purpose of this tax, a
who is not a: ‘stranger’ is a person who is not a:

(1) Brother, sister (whether by whole or (1) Brother, sister (whether by whole or
half-blood), spouse, ancestor and lineal half-blood), spouse, ancestor and lineal
descendant; or descendant; or
Page 34 of 139
(2) Relative by consanguinity in the (2) Relative by consanguinity in the
collateral line within the fourth degree of collateral line within the fourth degree of
relationship. relationship.]
2. Transfer for SEC. 100. Transfer for Less Than Adequate and
SEC. 100. Transfer for Less Than Adequate The sale, exchange or other transfer
less than Full Consideration. – Where property, other and Full Consideration. - Where property, of property made in the ordinary
adequate and than real property referred to in Section 24(D),
other than real property referred to in course of business (bona fide
full is transferred for less than an adequate and full
Section 24(D) is transferred for less than an transaction and at arm’s length) shall
consideration consideration in money or money's worth, then
adequate and full consideration in money or be considered made for adequate and
[Section 100] the amount by which the fair market value ofmoney's worth, then the amount by which full consideration in money and
the property exceeded the value of the the fair market value of the property money’s worth, hence, not subject to
consideration shall, for the purpose of the tax
exceeded the value of the consideration donor’s tax
imposed by this Chapter, be deemed a gift, and
shall, for the purpose of the tax imposed by
shall be included in computing the amount ofthis Chapter, be deemed a gift, and shall be
gifts made during the calendar year. included in computing the amount of gifts
made during the calendar year[.]:
PROVIDED, HOWEVER, THAT A SALE,
EXCHANGE, OR OTHER TRANSFER OF
PROPERTY MADE IN THE ORDINARY
COURSE OF BUSINESS (A
TRANSACTION WHICH IS A BONA FIDE,
AT ARM’S LENGTH, AND FREE FROM
ANY DONATIVE INTENT), WILL BE
CONSIDERED AS MADE FOR AN
ADEQUATE AND FULL CONSIDERATION
IN MONEY OR MONEY’S WORTH.
3. Exempt gifts SEC. 101. Exemption of Certain Gifts. – The SEC. 101. Exemption of Certain Gifts. – The Removes the first P10,000 exemption
[Section 101] following gifts or donations shall be exempt following gifts or donations shall be exempt from donor’s tax of dowries or gifts
from the tax provided for in this Chapter: from the tax provided for in this Chapter: made on account of marriage. Hence,
regardless of the amount, the same
(A) In the Case of Gifts Made by a Resident. (A) In the Case of Gifts Made by a Resident. shall be subject to donor’s tax.
– –
(1) Dowries or gifts made on account of [(1) Dowries or gifts made on account of
marriage and before its celebration or within marriage and before its celebration or
one year thereafter by parents to each of their within one year thereafter by parents to
legitimate, recognized natural, or adopted each of their legitimate, recognized natural,
children to the extent of the first Ten thousand or adopted children to the extent of the first
pesos (P10,000); Ten thousand pesos (P10,000):]
Page 35 of 139
IV. Value-Added Tax
Tax Code Present Provision TRAIN Amendment Reform Measure
Provision
1. VAT zero- (2) The following sales by VAT- 2) The following sales by VAT-registered
rated sale of registered persons shall be subject persons shall be subject to zero percent
goods [Section to zero percent (0%) rate: (0%) rate:
106(A)(2)]
(a) Export Sales. - The term (a) Export Sales. – The term “export sales”
"export sales" means: means:

(1) The sale and actual shipment of (1) The sale and actual shipment of goods
goods from the Philippines to a from the Philippines to a foreign country,
foreign country, irrespective of any irrespective of any shipping arrangement
shipping arrangement that may be that may be agreed upon which may
agreed upon which may influence influence or determine the transfer of
or determine the transfer of ownership of the goods so exported and
ownership of the goods so exported paid for in acceptable foreign currency or its
and paid for in acceptable foreign equivalent in goods or services, and
currency or its equivalent in goods accounted for in accordance with the rules
or services, and accounted for in and regulations of the Bangko Sentral ng
accordance with the rules and Pilipinas (BSP);
regulations of the Bangko Sentral
ng Pilipinas (BSP);

(2) SALE AND DELIVERY OF GOODS TO: 1. Inserts a new provision which
categorically treats as VAT zero-rated the
(I) REGISTERED ENTERPRISES WITHIN sale and delivery of goods to registered
A SEPARATE CUSTOMS TERRITORY AS enterprises within separate customs
PROVIDED UNDER SPECIAL LAWS; AND territories as provided under special law, and
registered enterprises within tourism
(II) REGISTERED ENTERPRISES enterprises zones as declared by the Tourism
WITHIN TOURISM ENTERPRISE ZONES Infrastructure and Enterprise Zone Authority
AS DECLARED BY THE TOURISM (TIEZA).
INFRASTRUCTURE AND ENTERPRISE
ZONE AUTHORITY (TIEZA) SUBJECT TO
THE PROVISIONS UNDER REPUBLIC
ACT NO. 9593 OR THE TOURISM ACT OF
2009
Page 36 of 139
(2) Sale of raw materials or ([2] 3) Sale of raw materials or packaging
packaging materials to a materials to a nonresident buyer for delivery
nonresident buyer for delivery to a to a resident local export-oriented enterprise
resident local export-oriented to be used in manufacturing, processing,
enterprise to be used in packing or repacking in the Philippines of the
manufacturing, processing, packing said buyer’s goods and paid for in
or repacking in the Philippines of acceptable foreign currency and accounted
the said buyer's goods and paid for for in accordance with the rules and
in acceptable foreign currency and regulations of the Bangko Sentral ng
accounted for in accordance with Pilipinas (BSP);
the rules and regulations of the
Bangko Sentral ng Pilipinas (BSP);

(3) Sale of raw materials or ([3] 4) Sale of raw materials or packaging


packaging materials to export- materials to export-oriented enterprise
oriented enterprise whose export whose export sales exceed seventy percent
sales exceed seventy percent (70%) of total annual production;
(70%) of total annual production;

(4) Sale of gold to the Bangko [(4) Sale of gold to the Bangko Sentral ng 2. Removes the VAT zero-rating on sale of
Sentral ng Pilipinas (BSP); and Pilipinas (BSP);] gold to BSP. Sale of gold to BSP shall be
treated as VAT-exempt transaction under
(5) Those considered export sales (5) Those considered export sales under Section 109.
under Executive Order NO. 226, Executive Order No. 226, otherwise known
otherwise known as the "Omnibus as the Omnibus Investment Code of 1987,
Investment Code of 1987", and and other special laws; and
other special laws; and

(6) The sale of goods, supplies, (6) The sale of goods, supplies, equipment 3. Clarifies that the VAT zero rating of sale of
equipment and fuel to persons and fuel to persons engaged in international goods, supplies and equipment and fuel to
engaged in international shipping 20 shipping or international air transport persons engaged in international shipping or
or international air transport operations[.]: PROVIDED, THAT THE international airport operations shall be
operations. GOODS, SUPPLIES, EQUIPMENT AND limited to those used for international
FUEL SHALL BE USED FOR shipping or air transport operations.
INTERNATIONAL SHIPPING OR AIR
TRANSPORT OPERATIONS.

Page 37 of 139
PROVIDED, THAT SUBPARAGRAPHS (3), 4. Sale of raw materials or packaging
(4), AND (5) HEREOF SHALL BE materials to a nonresident for delivery to a
SUBJECT TO THE TWELVE PERCENT resident, sale of raw materials to export-
(12%) VALUE-ADDED TAX AND NO oriented enterprises whose export sales
LONGER BE CONSIDERED EXPORT exceed 70%, and export sales under
SALES SUBJECT TO ZERO PERCENT Executive Order No. 226 (Omnibus
(0%) VAT RATE UPON SATISFACTION Investment Code) shall no longer be treated
OF THE FOLLOWING CONDITIONS: as zero-rated sale upon successful
establishment and implementation of
1. THE SUCCESSFUL ESTABLISHMENT enhanced VAT refund system.
AND IMPLEMENTATION OF AN
ENHANCED VAT REFUND SYSTEM THAT
GRANTS REFUNDS OF CREDITABLE
INPUT TAX WITHIN NINETY (90) DAYS
FROM THE FILING OF THE VAT REFUND
APPLICATION WITH THE BUREAU:
PROVIDED, THAT, TO DETERMINE THE
EFFECTIVITY OF ITEM NO. 1, ALL
APPLICATIONS FILED FROM JANUARY
1, 2018 SHALL BE PROCESSED AND
MUST BE DECIDED WITHIN NINETY
(90) DAYS FROM THE FILING OF THE
VAT REFUND APPLICATION;

2. ALL PENDING VAT REFUND CLAIMS 5. Mandates the payment in cash by 31


AS OF DECEMBER 31, 2017 SHALL BE December 2019 of all pending VAT refund
FULLY PAID IN CASH BY DECEMBER 31, claims as of 31 December 2017.
2019.

PROVIDED, THAT THE DEPARTMENT OF 6. Establishes a VAT refund center in the


FINANCE SHALL ESTABLISH A VAT Bureau of Internal Revenue and Bureau of
REFUND CENTER IN THE BUREAU OF Customs which will handle the processing of
INTERNAL REVENUE (BIR) AND IN THE application for VAT refund.
BUREAU OF CUSTOMS (BOC) THAT WILL
HANDLE THE PROCESSING AND
GRANTING OF CASH REFUNDS OF
CREDITABLE INPUT TAX.

Page 38 of 139
AN AMOUNT EQUIVALENT TO FIVE 7. Mandates the automatic appropriation of
PERCENT (5%) OF THE TOTAL VALUE- 5% of total VAT collections of the Bureau of
ADDED TAX COLLECTION OF THE BIR Internal Revenue and Bureau of Customs
AND THE BOC FOR THE IMMEDIATELY from the immediately preceding year to fund
PRECEDING YEAR SHALL BE claims for VAT refund.
AUTOMATICALLY APPROPRIATED
ANNUALLY AND SHALL BE TREATED AS
A SPECIAL ACCOUNT IN THE GENERAL
FUND OR AS TRUST RECEIPTS FOR THE
PURPOSE OF FUNDING CLAIMS FOR
VAT REFUND: PROVIDED, THAT ANY
UNUSED FUND, AT THE END OF THE
YEAR SHALL REVERT TO THE GENERAL
FUND.

PROVIDED, FURTHER, THAT THE BIR


AND BOC SHALL BE REQUIRED TO
SUBMIT TO THE CONGRESSIONAL
OVERSIGHT COMMITTEE ON THE
COMPREHENSIVE TAX REFORM
PROGRAM (COCCTRP) A QUARTERLY
REPORT OF ALL PENDING CLAIMS FOR
REFUND AND ANY UNUSED FUND.

(b) Foreign Currency Denominated [(b) Foreign Currency Denominated Sale. – 8. Removes the VAT zero rating of foreign
Sale. - The phrase "foreign The phrase ‘foreign currency denominated currency denominated sales, i.e., sale to a
currency denominated sale" means sale’ means sale to a nonresident of goods, non-resident of goods assembled or
sale to a nonresident of goods, except those mentioned in Sections 149 and manufactured in the Philippines for delivery
except those mentioned in Sections 150, assembled or manufactured in the to a resident in the Philippines, paid for in
149 and 150, assembled or Philippines for delivery to a resident in the acceptable foreign currency and accounted
manufactured in the Philippines for Philippines, paid for in acceptable foreign with the Bangko Sentral ng Pilipinas (BSP)
delivery to a resident in the currency and accounted for in accordance rules and regulations.
Philippines, paid for in acceptable with the rules and regulations of the Bangko
foreign currency and accounted for Sentral ng Pilipinas (BSP).]
in accordance with the rules and
regulations of the Bangko Sentral
ng Pilipinas (BSP).

Page 39 of 139
(c) Sales to persons or entities ([c] B) Sales to persons or entities whose
whose exemption under special exemption under special laws or
laws or international agreements to international agreements to which the
which the Philippines is a signatory Philippines is a signatory effectively subjects
effectively subjects such sales to such sales to zero rate.;
zero rate.
2. VAT zero- SEC. 108. Value-added Tax on Sale SEC. 108. Value-added Tax on Sale of
rated sale of of Services and Use or Lease of Services and Use or Lease of Properties. –
services [Section Properties. -
108]
The phrase “sale or exchange of The phrase ‘sale or exchange of services’
services” means the performance means the performance of all kinds of
of all kinds of services in the services in the Philippines for others for a
Philippines for others for a fee, fee, remuneration or consideration,
remuneration or consideration, including those performed or rendered by
including those performed or construction and service contractors; stock,
rendered by construction and real estate, commercial, customs and
service contractors; stock, real immigration brokers; lessors of property,
estate, commercial, customs and whether personal or real; warehousing
immigration brokers; lessors of services; lessors or distributors of
property, whether personal or real; cinematographic films; persons engaged in
warehousing services; lessors or milling, processing, manufacturing or
distributors of cinematographic repacking goods for others; proprietors,
films; persons engaged in milling operators or keepers of hotels, motels,
processing, manufacturing or resthouses, pension houses, inns, resorts;
repacking goods for others; proprietors or operators of restaurants,
proprietors, operators or keepers of refreshment parlors, cafes and other eating
hotels, motels, rest houses, places, including clubs and caterers; dealers
pension houses, inns, resorts; in securities; lending investors;
proprietors or operators of transportation contractors on their transport
restaurants, refreshment parlors, of goods or cargoes, including persons who
cafes and other eating places, transport goods or cargoes for hire and
including clubs and caterers; other domestic common carriers by land
dealers in securities; lending relative to their transport of goods or
investors; transportation cargoes; common carriers by air and sea
contractors on their transport of relative to their transport of passengers,
goods or cargoes, including persons goods or cargoes from one place in the
who transport goods or cargoes for Philippines to another place in the
Page 40 of 139
hire another domestic common Philippines; sales of electricity by generation 1. Covers the sales of electricity, transmission
carriers by land relative to their companies, transmission BY ANY ENTITY, and distribution by electric cooperatives in the
transport of goods or cargoes; and distribution companies, INCLUDING definition of phrase “sale or exchange of
common carriers by air and sea ELECTRIC COOPERATIVES; services of services” for VAT purposes.
relative to their transport of franchise grantees of electric utilities,
passengers, goods or cargoes from telephone and telegraph, radio and
one place in the Philippines to television broadcasting and all other
another place in the Philippines; franchise grantees except those under
sales of electricity by generation Section 119 of this Code and non-life
companies, transmission, and insurance companies (except their crop
distribution companies; services of insurances), including surety, fidelity,
franchise grantees of electric indemnity and bonding companies; and
utilities, telephone and telegraph, similar services regardless of whether or not
radio and television broadcasting the performance thereof calls for the
and all other franchise grantees exercise or use of the physical or mental
except those under section 119 of faculties. The phrase ‘sale or exchange of
this Code, and non-life insurance services’ shall likewise include:
companies (except their crop
insurances), including surety, xxx
fidelity, indemnity, and bonding
companies; and similar services
regardless of whether or not the
performance thereof calls for the
exercise or use of the physical or
mental faculties. The phrase "sale
or exchange of services" shall
likewise include:

xxx

(B) Transactions Subject to Zero (B) Transactions Subject to Zero Percent


Percent (0%) Rate - The following (0%) Rate. – The following services
services performed in the performed in the Philippines by VAT-
Philippines by VAT- registered registered persons shall be subject to zero
persons shall be subject to zero percent (0%) rate:
percent (0%) rate.

Page 41 of 139
(1) Processing, manufacturing or (1) Processing, manufacturing or repacking
repacking goods for other persons goods for other persons doing business
doing business outside the outside the Philippines which goods are
Philippines which goods are subsequently exported, where the services
subsequently exported, where the are paid for in acceptable foreign currency
services are paid for in acceptable and accounted for in accordance with the
foreign currency and accounted for rules and regulations of the Bangko Sentral
in accordance with the rules and ng Pilipinas (BSP);
regulations of the Bangko Sentral
ng Pilipinas (BSP);

(2) Services other than those (2) Services other than those mentioned in
mentioned in the preceding the preceding paragraph, rendered to a
paragraph, rendered to a person person engaged in business conducted
engaged in business conducted outside the Philippines or to a nonresident
outside the Philippines or to a person not engaged in business who is
nonresident person not engaged in outside the Philippines when the services are
business who is outside the performed, the consideration for which is
Philippines when the services are paid for in acceptable foreign currency and
performed, the consideration for accounted for in accordance with the rules
which is paid for in acceptable and regulations of the Bangko Sentral ng
foreign currency and accounted for Pilipinas (BSP);
in accordance with the rules and
regulations of the Bangko Sentral
ng Pilipinas (BSP)

(3) Services rendered to persons or (3) Services rendered to persons or entities


entities whose exemption under whose exemption under special laws or
special laws or international international agreements to which the
agreements to which the Philippines is a signatory effectively subjects
Philippines is a signatory effectively the supply of such services to zero percent
subjects the supply of such services (0%) rate;
to zero percent (0%) rate;

(4) Services rendered to persons (4) Services rendered to persons engaged in 2. Limits the VAT zero rating of sale of
engaged in international shipping international shipping or international air services to persons engaged in international
or international air transport transport operations, including leases of shipping or international airport operations to
property for use thereof: PROVIDED, THAT
Page 42 of 139
operations, including leases of THESE SERVICES SHALL BE services exclusively for international shipping
property for use thereof. EXCLUSIVELY FOR INTERNATIONAL or air transport operations.
SHIPPING OR AIR TRANSPORT
OPERATIONS;

(5) Services performed by (5) Services performed by subcontractors


subcontractors and/or contractors and/or contractors in processing, converting,
in processing, converting, of or manufacturing goods for an enterprise
manufacturing goods for an whose export sales exceed seventy percent
enterprise whose export sales (70%) of total annual production;
exceed seventy percent (70%) of
total annual production.

(6) Transport of passengers and (6) Transport of passengers and cargo by 3. For clarity, specifies that transport of
cargo by air or sea vessels from the DOMESTIC air or sea vessels from the passengers and cargo by “domestic” air or sea
Philippines to a foreign country; Philippines to a foreign country; and vessels from the Philippines to a foreign
and country is a VAT zero rated transaction.

(7) Sale of power or fuel generated (7) Sale of power or fuel generated through
through renewable sources of renewable sources of energy such as, but
energy such as, but not limited to, not limited to, biomass, solar, wind,
biomass, solar, wind, hydropower, hydropower, geothermal, ocean energy, and
geothermal, ocean energy, and other emerging energy sources using
other emerging energy sources technologies such as fuel cells and hydrogen
using technologies such as fuel fuels.
cells and hydrogen fuels.
(8) SERVICES RENDERED TO: 4. Inserts a new provision which
categorically treats as VAT zero rated the sale
(i) REGISTERED ENTERPRISES WITHIN and delivery of goods to registered enterprises
A SEPARATE CUSTOMS TERRITORY AS within the separate customs territory/ies as
PROVIDED UNDER SPECIAL LAW; AND provided under special law, and registered
enterprises within tourism enterprises zones
(ii) REGISTERED ENTERPRISES WITHIN as declared by the Tourism Infrastructure and
TOURISM ENTERPRISE ZONES AS Enterprise Zone Authority (TIEZA).
DECLARED BY THE TIEZA SUBJECT TO
THE PROVISIONS UNDER REPUBLIC
ACT NO. 9593 OR THE TOURISM ACT OF
2009.
Page 43 of 139
PROVIDED, THAT SUBPARAGRAPHS 5. The processing, manufacturing, or
(B)(1) AND (B)(5) HEREOF SHALL BE repacking goods for other persons doing
SUBJECT TO THE TWELVE PERCENT business outside the Philippines which goods
(12%) VALUE-ADDED TAX AND NO are subsequently exported, where the services
LONGER BE SUBJECT TO ZERO PERCENT are paid for in acceptable foreign currency and
(0%) VAT RATE UPON SATISFACTION accounted for in accordance with the rules and
OF THE FOLLOWING CONDITIONS: regulations of the BSP and services performed
by subcontractors and/or contractors in
1. THE SUCCESSFUL ESTABLISHMENT processing, converting, or manufacturing
AND IMPLEMENTATION OF AN goods for an enterprise whose export sales
ENHANCED VAT REFUND SYSTEM THAT exceed 70% of total annual production shall
GRANTS REFUNDS OF CREDITABLE no longer be treated as VAT zero-rated sale
INPUT TAX WITHIN NINETY (90) DAYS upon successful establishment and
FROM THE FILING OF THE VAT REFUND implementation of enhanced VAT refund
APPLICATION WITH THE BUREAU: system.
PROVIDED, THAT, TO DETERMINE THE
EFFECTIVITY OF ITEM NO. 1, ALL
APPLICATIONS FILED FROM JANUARY
1, 2018 SHALL BE PROCESSED AND
MUST BE DECIDED WITHIN NINETY
(90) DAYS FROM THE FILING OF THE
VAT REFUND APPLICATION;

2. ALL PENDING VAT REFUND CLAIMS 6. Mandates the payment in cash by 31


AS OF DECEMBER 31, 2017 SHALL BE December 2019 of all pending VAT refund
FULLY PAID IN CASH BY DECEMBER 31, claims as of 31 December 2017.
2019.

PROVIDED, THAT THE DEPARTMENT OF 7. Establishes a VAT refund center in the


FINANCE SHALL ESTABLISH A VAT Bureau of Internal Revenue and Bureau of
REFUND CENTER IN THE BUREAU OF Customs that will handle the processing of
INTERNAL REVENUE (BIR) AND IN THE application for VAT refund.
BUREAU OF CUSTOMS (BOC) THAT WILL
HANDLE THE PROCESSING AND
GRANTING OF CASH REFUNDS OF
CREDITABLE INPUT TAX.

Page 44 of 139
AN AMOUNT EQUIVALENT TO FIVE 8. Mandates the automatic appropriation of
PERCENT (5%) OF THE TOTAL VALUE- 5% of total VAT collections of the Bureau of
ADDED TAX COLLECTION OF THE BIR Internal Revenue and Bureau of Customs from
AND THE BOC FOR THE IMMEDIATELY the immediately preceding year to fund claims
PRECEDING YEAR SHALL BE for VAT refund.
AUTOMATICALLY APPROPRIATED
ANNUALLY AND SHALL BE TREATED AS
A SPECIAL ACCOUNT IN THE GENERAL
FUND OR AS TRUST RECEIPTS FOR THE
PURPOSE OF FUNDING CLAIMS FOR
VAT REFUND: PROVIDED, THAT ANY
UNUSED FUND, AT THE END OF THE
YEAR SHALL REVERT TO THE GENERAL
FUND.

PROVIDED, FURTHER, THAT THE BIR


AND BOC SHALL BE REQUIRED TO
SUBMIT TO THE COCCTRP A QUARTERLY
REPORT OF ALL PENDING CLAIMS FOR
REFUND AND ANY UNUSED FUND.
3. VAT-exempt SEC. 109. Exempt Transactions. - SEC. 109. Exempt Transactions. –
transactions
[Section 109] (1) Subject to the provisions of (1) SUBJECT TO THE PROVISIONS OF
Subsection (2) hereof, the following SUBSECTION (2) HEREOF, THE following
transactions shall be exempt from TRANSACTIONS shall be exempt from the
the value-added tax. value-added tax:

xxx xxx xxx xxx xxx xxx

(D) Importation of professional [(D.) Importation of professional


instruments and implements, instruments and implements, wearing
wearing apparel, domestic animals, apparel, domestic animals, and personal
and personal household effects household effects (except any vehicle,
(except any vehicle, vessel, vessel, aircraft, machinery, other goods for
aircraft, machinery other goods for use in the manufacture and merchandise of
use in the manufacture and any kind in commercial quantity) belonging
merchandise of any kind in to persons coming to settle in the
commercial quantity) belonging to Philippines, for their own use and not for
Page 45 of 139
persons coming to settle in the sale, barter or exchange, accompanying
Philippines, for their own use and such persons, or arriving within ninety (90)
not for sale, barter or exchange, days before or after their arrival, upon the
accompanying such persons, or production of evidence satisfactory to the
arriving within ninety (90) days Commissioner, that such persons are
before or after their arrival, upon actually coming to settle in the Philippines
the production of evidence and that the change of residence is bona
satisfactory to the Commissioner, fide;]
that such persons are actually
coming to settle in the Philippines
and that the change of residence is
bona fide;

(D) IMPORTATION OF PROFESSIONAL 1. Clarifies that persons coming to settle in the


INSTRUMENTS AND IMPLEMENTS, Philippines or Filipinos or their families who
TOOLS OF TRADE, OCCUPATION OR are considered as residents or citizens of other
EMPLOYMENT, WEARING APPAREL, countries such as OFWs may import certain
DOMESTIC ANIMALS, AND PERSONAL VAT-free goods including their personal and
AND HOUSEHOLD EFFECTS BELONGING household effects in quantities and of class
TO PERSONS COMING TO SETTLE IN suitable to the profession, rank or position of
THE PHILIPPINES OR FILIPINOS OR the person importing said items, for their own
THEIR FAMILIES AND DESCENDANTS use and not for barter or sale, or arriving
WHO ARE NOW RESIDENTS OR within a reasonable time.
CITIZENS OF OTHER COUNTRIES, SUCH
PARTIES HEREINAFTER REFERRED TO
AS OVERSEAS FILIPINOS, IN
QUANTITIES AND OF THE CLASS
SUITABLE TO THE PROFESSION, RANK
OR POSITION OF THE PERSONS
IMPORTING SAID ITEMS, FOR THEIR
OWN USE AND NOT FOR BARTER OR
SALE, ACCOMPANYING SUCH PERSONS,
OR ARRIVING WITHIN A REASONABLE
TIME: PROVIDED, THAT THE BUREAU OF
CUSTOMS MAY, UPON THE
PRODUCTION OF SATISFACTORY
EVIDENCE THAT SUCH PERSONS ARE
ACTUALLY COMING TO SETTLE IN THE
Page 46 of 139
PHILIPPINES AND THAT THE GOODS
ARE BROUGHT FROM THEIR FORMER
PLACE OF ABODE, EXEMPT SUCH GOODS
FROM PAYMENT OF DUTIES AND TAXES:
PROVIDED, FURTHER, THAT VEHICLES,
VESSELS, AIRCRAFTS, MACHINERIES
AND OTHER SIMILAR GOODS FOR USE
IN MANUFACTURE, SHALL NOT FALL
WITHIN THIS CLASSIFICATION AND
SHALL THEREFORE BE SUBJECT TO
DUTIES, TAXES AND OTHER CHARGES;

(E) Services subject to percentage (E) Services subject to percentage tax under
tax under Title V; Title V;

(F) Services by agricultural contract (F) Services by agricultural contract growers


growers and milling for others of and milling for others of palay into rice, corn
palay into rice, corn into grits and into grits and sugar cane into raw sugar;
sugar cane into raw sugar;

(G) Medical, dental, hospital and (G) Medical, dental, hospital and veterinary
veterinary services except those services except those rendered by
rendered by professionals. professionals;

(H) Educational services rendered (H) Educational services rendered by private


by private educational institutions, educational institutions, duly accredited by
duly accredited by the Department the Department of Education (DepEd), the
of Education(DepED), the Commission on Higher Education (CHED),
Commission on Higher Education the Technical Education and Skills
(CHED), the Technical Education Development Authority (TESDA) and those
and Skills Development Authority rendered by government educational
(TESDA)and those rendered by institutions;
government educational
institutions;

(I) Services rendered by individuals (I) Services rendered by individuals


pursuant to an employer-employee pursuant to an employer-employee
relationship; relationship;
Page 47 of 139
(J) Services rendered by regional or (J) Services rendered by regional or area
area headquarters established in headquarters established in the Philippines
the Philippines by multinational by multinational corporations which act as
corporations which act as supervisory, communications and
supervisory, communications and coordinating centers for their affiliates,
coordinating centers for their subsidiaries or branches in the Asia-Pacific
affiliates, subsidiaries or branches Region and do not earn or derive income
in the Asia-Pacific Region and do from the Philippines;
not earn or derive income from the
Philippines;

(K) Transactions which are exempt (K) Transactions which are exempt under
under international agreements to international agreements to which the
which the Philippines is a signatory Philippines is a signatory or under special
or under special laws, except those laws, except those under Presidential Decree
under Presidential Decree No. 529; No. 529;

(L) Sales by agricultural (L) Sales by agricultural cooperatives duly


cooperatives duly registered with registered with the Cooperative
the Cooperative Development Development Authority to their members as
Authority to their members as well well as sale of their produce, whether in its
as sale of their produce, whether in original state or processed form, to non-6
its original state or processed form, members; their importation of direct farm
to non-members; their importation inputs, machineries and equipment,
of direct farm inputs, machineries including spare parts thereof, to be used
and equipment, including spare directly and exclusively in the production
parts thereof, to be used directly and/or processing of their produce;
and exclusively in the production
and/or processing of their produce;

(M) Gross receipts from lending (M) Gross receipts from lending activities by
activities by credit or multi-purpose credit or multi-purpose cooperatives duly
cooperatives duly registered with registered with the Cooperative
the Cooperative Development Development Authority;
Authority;

Page 48 of 139
(N) Sales by non-agricultural, non- (N) Sales by non-agricultural, non-electric
electric and non-credit cooperatives and non-credit cooperatives duly registered
duly registered with the with the Cooperative Development
Cooperative Development Authority: Provided, That the share capital
Authority: Provided, That the share contribution of each member does not
capital contribution of each exceed Fifteen thousand pesos (P15,000)
member does not exceed Fifteen and regardless of the aggregate capital and
thousand pesos (P15,000) and net surplus ratably distributed among the
regardless of the aggregate capital members;
and net surplus ratably distributed
among the members;

(O) Export sales by persons who (O) Export sales by persons who are not
are not VAT-registered; VAT-registered;

(P) Sale of real properties not (P) Sale of real properties not primarily held
primarily held for sale to customers for sale to customers or held for lease in the
or held for lease in the ordinary ordinary course of trade or business or real
course of trade or business or real property utilized for low-cost and socialized
property utilized for low-cost and housing as defined by Republic Act No.
socialized housing as defined by 7279, otherwise known as the Urban
Republic Act No. 7279, otherwise Development and Housing Act of 1992, and
known as the Urban Development other related laws, residential lot valued at
and Housing Act of 1992, and other One million pesos (P1,500,000) and below,
related laws, residential lot valued house and lot, and other residential
at One million pesos (P1,500,000) dwellings valued at Two million five hundred
and below, house and lot, and thousand pesos (P2,500,000) and below:
other residential dwellings valued Provided, THAT BEGINNNING JANUARY 2. Beginning 01 January 2021, the coverage of
at Two million five hundred 1, 2021, THE VAT EXEMPTION SHALL VAT exemption on sale of real properties shall
thousand pesos (P2, 500, 000) and ONLY APPLY TO SALE OF REAL be limited to the following:
below: Provided, That not later PROPERTIES NOT PRIMARILY HELD FOR
than January 31, 2009 and every SALE TO CUSTOMERS OR HELD FOR a. Sale of real properties not primarily held
three (3) years thereafter, the LEASE IN THE ORDINARY COURSE OF for sale to customers or held for lease in
amount herein stated shall be TRADE OR BUSINESS, SALE OF REAL the ordinary course of trade or business;
adjusted to their present values PROPERTY UTILIZED FOR SOCIALIZED b. Sale of real property for socialized housing
using the Consumer Price Index, as HOUSING AS DEFINED BY REPUBLIC as defined under Republic Act No. 7279;
published by the National Statistics ACT NO. 7279, SALE OF HOUSE AND and
Office (NSO); LOT, AND OTHER RESIDENTIAL
Page 49 of 139
DWELLINGS WITH SELLING PRICE OF c. Sale of house and lot and other residential
NOT MORE THAN TWO MILLION PESOS dwellings with selling price of not more
(P2,000,000): PROVIDED, FURTHER, than P2 Million.
That [not later than January 31, 2009 and]
every three (3) years thereafter, the amount
herein stated shall be adjusted to [their]
ITS present value[s] using the Consumer
Price Index, as published by the [National
Statistics Office (NSO)]PHILIPPINE
STATISTICS AUTHORITY (PSA);

(Q) Lease of a residential unit with (Q) Lease of a residential unit with a 3. Increases the threshold VAT-exempt lease
a monthly rental not exceeding Ten monthly rental not exceeding FIFTEEN of residential unit from P10,000 to P15,000
thousand pesos (P10, 000): [Ten] thousand pesos [(P10,000)] per month.
[62]Provided, That not later than (P15,000) [: Provided, That not later than
January 31, 2009 and every three January 31, 2009 and every three (3) years
(3) years thereafter, the amount thereafter, the amount herein stated shall
herein stated shall be adjusted to be adjusted to its present value using the
its present value using the Consumer Price Index, as published by the
Consumer Price Index as published National Statistics Office (NSO)];
by the National Statistics Office
(NSO);

(R) Sale, importation, printing or (R) Sale, importation, printing or publication


publication of books and any of books and any newspaper, magazine,
newspaper, magazine review or review or bulletin which appears at regular
bulletin which appears at regular intervals with fixed prices or subscription
intervals with fixed prices for and sale and which is not devoted principally
subscription and sale and which is to the publication of paid advertisements;
not devoted principally to the
publication of paid advertisements;

(S) Transport of passengers by (S) Transport of passengers by international


international carriers; carriers;

(T) Sale, importation or lease of (T) Sale, importation or lease of passenger


passenger or cargo vessels and or cargo vessels and aircraft, including
aircraft, including engine, engine, equipment and spare parts thereof
Page 50 of 139
equipment and spare parts thereof for domestic or international transport
for domestic or international operations;
transport operations;

(U) Importation of fuel, goods and (U) Importation of fuel, goods and supplies 4. Limits the VAT exemption on importation of
supplies by persons engaged in by persons engaged in international shipping fuel, goods, and supplies by persons engaged
international shipping or air or air transport operations: PROVIDED, in international shipping or international
transport operations; THAT THE FUEL, GOODS, AND SUPPLIES airport operations to those used exclusively
SHALL BE USED FOR INTERNATIONAL for international shipping or air transport
SHIPPING OR AIR TRANSPORT operations.
OPERATIONS;

(V) Services of bank, non-bank (V) Services of bank, non-bank financial


financial intermediaries performing intermediaries performing quasi-banking
quasi-banking functions, and other functions, and other non-bank financial
non-bank financial intermediaries; intermediaries; [and]
an

(W) Sale or lease of goods or (W) SALE OR LEASE OF GOODS AND 5. Inserts a new proviso incorporating the
properties or the performance of SERVICES TO SENIOR CITIZENS AND provision of Expanded Senior Citizen’s Act (RA
services other than the transactions PERSONS WITH DISABILITIES, AS 9954) and Persons with Disability Act (RA
mentioned in the preceding PROVIDED UNDER REPUBLIC ACT NOS. 10754) exempting from VAT the sale or lease
paragraphs, the gross annual sales 9994 (EXPANDED SENIOR CITIZENS of goods and services to senior citizens and
and/or receipts do not exceed the ACT OF 2010) AND 10754 (AN ACT persons with disabilities.
amount of One million five hundred EXPANDING THE BENEFITS AND
thousand pesos (P1,500,000): PRIVILEGES OF PERSONS WITH
Provided, That not later than DISABILITY), RESPECTIVELY;
January 31, 2009 and every three
(3) years thereafter, the amount (X) TRANSFER OF PROPERTY 6. Exempts from VAT the transfer of property
herein stated shall be adjusted to PURSUANT TO SECTION 40(C)(2) OF pursuant to Section 40(C)(2) of the Tax Code.
its present With footnote in the THE NIRC, AS AMENDED;
book value using the Consumer
Price Index, as published by. the (Y) ASSOCIATION DUES, MEMBERSHIP 7. Exempts from VAT association dues,
National Statistics-Office (NSO). FEES, AND OTHER ASSESSMENTS AND membership fees, and other assessments and
CHARGES COLLECTED BY HOMEOWNERS charges collected by homeowners associations
ASSOCIATIONS AND CONDOMINIUM and condominium corporations.
CORPORATIONS;

Page 51 of 139
(Z) SALE OF GOLD TO THE BANGKO 8. Treats sale of gold to BSP as VAT exempt
SENTRAL NG PILIPINAS; instead of VAT zero-rated.

(AA) SALE OF DRUGS AND MEDICINES 9. Exempts from VAT the sale to final
FOR DIABETES, HIGH CHOLESTEROL, consumers of drugs and medicines prescribed
AND HYPERTENSION BEGINNING for diabetes, high cholesterol and
JANUARY 1, 2019; AND hypertension starting 01 January 2019.

[(W)](BB) Sale or lease of goods or 10. Increases the VAT-exempt threshold on


properties or the performance of services sale or lease of goods or properties or the
other than the transactions mentioned in the performance of services from P1.5M gross
preceding paragraphs, the gross annual annual sales and/or receipts to P3M.
sales and/or receipts do not exceed the
amount of [One million five hundred
thousand] THREE MILLION pesos
[(P1,500,000)] (P3,000,000).
3. Input VAT SEC. 110. Tax Credits. - SEC. 110. Tax Credits. –
credit [Section
110(A)(2)] A. Creditable Input Tax. - “(A). Creditable Input Tax. –

(1) x x x (1) x x x

(2) x x x (2) x x x

(a) x x x (a) x x x

(b) x x x (b) x x x

Provided, that the input tax on Provided, That the input tax on goods
goods purchased or imported in a purchased or imported in a calendar month
calendar month for use in trade or for use in trade or business for which
business for which deduction for deduction for depreciation is allowed under
depreciation is allowed under this this Code shall be spread evenly over the
Code shall be spread evenly over month of acquisition and the fifty-nine (59)
the a month of acquisition and the succeeding months if the aggregate
fifty-nine (59) succeeding months if acquisition cost for such goods, excluding
the aggregate acquisition cost for the VAT component thereof, exceeds One

Page 52 of 139
such goods, excluding the VAT million pesos (P1,000,000): Provided,
component thereof, exceeds One however, That if the estimated useful life of
million pesos (P1,000,000): the capital good is less than five (5) years,
Provided, however, That if the as used for depreciation purposes, then the
estimated useful life of the capital input VAT shall be spread over such a
good is less than five (5) years, as shorter period: PROVIDED, FURTHER, Eliminates the requirement to amortize input
used for depreciation purposes, THAT THE AMORTIZATION OF THE VAT on capital goods purchased and imported
then the input VAT shall be spread INPUT VAT SHALL ONLY BE ALLOWED by VAT taxpayers starting from 31 December
over such a shorter period: UNTIL DECEMBER 31, 2021 AFTER 2021. VAT taxpayers with unutilized input VAT
Provided, finally, that in the case of WHICH TAXPAYERS WITH UNUTILIZED on capital goods as of 31 December 2021
purchase of services, lease or use INPUT VAT ON CAPITAL GOODS shall be allowed to apply the same as
of properties, the input tax shall be PURCHASED OR IMPORTED SHALL BE scheduled until fully utilized.
creditable to the purchaser, lessee ALLOWED TO APPLY THE SAME AS
or license upon payment of the SCHEDULED UNTIL FULLY UTILIZED:
compensation, rental, royalty or Provided, finally, That in the case of
free. purchase of services, lease or use of
properties, the input tax shall be creditable
to the purchaser, lessee or license upon
payment of the compensation, rental ,
royalty or free.
4. VAT refund SEC. 112. Refunds or Tax Credits SEC. 112. Refunds or Tax Credits of Input
claims [Section of Input Tax. – Tax. –
112(C)]
(A) x x x (A) x x x

(B) x x x (B) x x x

(C) Period within which Refund or (C) Period within which Refund [or Tax 1. Reduces the period within which a claim
Tax Credit of Input Taxes shall be Credit] of Input Taxes shall be Made. - In for refund of excess unutilized input VAT
Made. – In proper cases, the proper cases, the Commissioner shall grant should be made by the BIR from 120 days to
Commissioner shall grant a refund a refund [or issue the tax credit certificate] 90 days from the date of submission of the
or issue the tax credit certificate for for creditable input taxes within [one official receipts or invoices and other
creditable input taxes within one hundred twenty (120)] NINETY (90) days documents.
hundred twenty (120) days from from the date of submission of THE
the date of submission of complete OFFICIAL RECEIPTS OR INVOICES AND
documents in support of the OTHER DOCUMENTS [complete
application filed in accordance with documents] in support of the application
Subsection (A) hereof. filed in accordance with Subsections (A)
Page 53 of 139
AND (B) hereof: PROVIDED, THAT
SHOULD THE COMMISSIONER FIND
THAT THE GRANT OF REFUND IS NOT
PROPER, THE COMMISSIONER MUST
STATE IN WRITING THE LEGAL AND
FACTUAL BASIS FOR THE DENIAL.

In case of full or partial denial of the claim


for tax refund [or tax credit, or the failure
on the part of the Commissioner to act on
the application within the period prescribed
above], the taxpayer affected may, within
thirty (30) days from the receipt of the
decision denying the claim [or after the
expiration of the one hundred twenty day-
period], appeal the decision [or the unacted
claim] with the Court of Tax Appeals:
PROVIDED, HOWEVER, THAT FAILURE 2. Imposes penalty on the official, agent or
ON THE PART OF ANY OFFICIAL, AGENT, employee of the BIR who fails to act on the
OR EMPLOYEE OF THE BIR TO ACT ON application for tax refund within 90 days.
THE APPLICATION WITHIN THE NINETY
(90)-DAY PERIOD SHALL BE
PUNISHABLE UNDER SECTION 269 OF
THIS CODE.
5. Return and SEC. 114. Return and Payment of “SEC. 114. Return and Payment of Value-
payment of VAT Value-Added Tax. - Added Tax. –
and transactions
subject to 12% (A) In General. - Every person (A) In General. – Every person liable to pay
final withholding liable to pay the value-added tax the value-added tax imposed under this Title
VAT [Section imposed under this Title shall file a shall file a quarterly return of the amount of
114(A) and (C)] quarterly return of the amount of his gross sales or receipts within twenty-five
his gross sales or receipts within (25) days following the close of each taxable
twenty-five (25) days following the quarter prescribed for each taxpayer:
close of each taxable quarter Provided, however, That VAT-registered
prescribed for each taxpayer: persons shall pay the value-added tax on a
Provided, however, That VAT- monthly basis: PROVIDED, FINALLY, 1. Filing and payment of VAT returns
registered persons shall pay the THAT BEGINNING JANUARY 1, 2023, beginning 01 January 2023 shall be made
THE FILING AND PAYMENT REQUIRED
Page 54 of 139
value-added tax on a monthly UNDER THIS SUBSECTION SHALL BE within 25 days from the close of the taxable
basis. DONE WITHIN TWENTY-FIVE (25) DAYS quarter.
FOLLOWING THE CLOSE OF EACH
TAXABLE QUARTER.

xxx xxx

(B) x x x (B) x x x

(C) Withholding of Value-added (C) Withholding of Value-added Tax. – The


Tax. - The Government or any of Government or any of its political
its political subdivisions, subdivisions, instrumentalities or agencies,
instrumentalities or agencies, including government-owned or controlled
including government-owned or - corporations (GOCCs) shall, before making
controlled corporations (GOCCs) payment on account of each purchase of
shall, before making payment on goods and services which are subject to the
account of each purchase of goods value-added tax imposed in Sections 106
and services which are f are subject and 108 of this Code, deduct and withhold
to the value-added tax imposed in the value-added tax imposed in Sections
Sections 106 and 108 of this Code, 106 and 108 of this Code, deduct and
deduct and withhold the value- withhold a final value-added tax at the rate
added tax imposed in Sections 106 of five percent (5%) of the gross payment
and 108 of this Code, deduct and thereof: Provided, That BEGINNING 2. Replaces the 5% final withholding VAT on
withhold a final value-added tax at JANUARY 1, 2021, THE VAT sales to government to creditable VAT
the rate of five percent (5%) of the WITHOLDING SYSTEM UNDER THIS beginning 01 January 2021.
gross payment thereof: Provided, SUBSECTION SHALL SHIFT FROM FINAL
That the payment for lease or use TO A CREDITABLE SYSTEM: PROVIDED,
of properties or property rights to FURTHER, THAT the payment for lease or
nonresident owners shall be subject use of properties or property rights to
to ten percent (10%) withholding nonresident owners shall be subject to [ten]
tax at the time of payment. For TWELVE percent [(10%)] (12%)
purposes of this Section, the payor withholding tax at the time of payment[.];
or person in control of the payment PROVIDED, HOWEVER, THAT PAYMENTS 3. Excludes payments for purchases of
shall be considered as the FOR PURCHASES OF GOODS AND goods and services arising from projects
withholding agent. SERVICES ARISING FROM PROJECTS funded by Official Development Assistance
FUNDED BY OFFICIAL DEVELOPMENT (ODA) among the transactions subject to 12%
ASSISTANCE (ODA) AS DEFINED UNDER final withholding VAT.
REPUBLIC ACT NO. 8182, OTHERWISE
Page 55 of 139
KNOWN AS THE “OFFICIAL
DEVELOPMENT ASSISTANCE ACT OF
1996”, AS AMENDED, SHALL NOT BE
SUBJECT TO THE FINAL WITHHOLDING
TAX SYSTEM AS IMPOSED IN THIS
SUBSECTION. For purposes of this Section,
the payor or person in control of the
payment shall be considered as the
withholding agent.
6. Persons SEC. 116. Tax on Persons Exempt “SEC. 116. Tax on Persons Exempt from 1. Exempts from VAT self-employed and
exempt from VAT from Value-Added Tax (VAT). - Any Value-added Tax (VAT). – Any person whose professionals whose gross sales or gross
(Section 116) person whose sales or receipts are sales or receipts are exempt under Section receipts do not exceed the VAT threshold and
exempt under Section 109(V) of 109 [(V)] (BB) of this Code from the who opt to pay the 8% tax.
this Code from the payment of payment of value-added tax and who is not
value-added tax and who is not a a VAT-registered person shall pay a tax 2. Self-employed individuals and/or
VAT-registered person shall pay a equivalent to three percent (3%) of his professionals, together with cooperatives, are
tax equivalent to three percent gross quarterly sales or receipts: Provided, exempt from 3% gross receipts tax on their
(3%) of his gross quarterly sales or That, cooperatives AND BEGINNING first P500,000 annual gross sales or gross
receipts: Provided, That JANUARY 1, 2019, SELF-EMPLOYED AND receipts beginning 01 January 2019.
cooperatives shall be exempt from PROFESSIONALS WITH TOTAL ANNUAL
the three percent (3%) gross GROSS SALES AND/OR GROSS
receipts tax herein imposed. RECEIPTS NOT EXCEEDING FIVE
HUNDRED THOUSAND PESOS
(P500,000) shall be exempt from the three
percent (3%) gross receipts tax herein
imposed.
7. Tax on Sale, SEC. 127. Tax on Sale, Barter or SEC. 127. Tax on Sale, Barter or Exchange Increases the stock transaction tax from 1/2
Barter or Exchange of Shares of Stock Listed of Shares of Stock Listed and Traded of 1% to 6/10 of 1% of the gross selling price
Exchange of and Traded through the Local Stock through the Local Stock Exchange or or gross value in money of the shares of stock
Shares of Stock Exchange or through Initial Public through Initial Public Offering. - sold, bartered, exchanged or otherwise
Listed and Offering. - disposed.
Traded through
the Local Stock (A) Tax on Sale, Barter or (A) Tax on Sale, Barter or Exchange of
Exchange or Exchange of Shares of Stock Listed Shares of Stock Listed and Traded through
through Initial and Traded through the Local Stock the Local Stock Exchange.- There shall be
Public Offering. Exchange.- There shall be levied, levied, assessed and collected on every sale,
[Section 127(A)] assessed and collected on every barter, exchange, or other disposition of
sale, barter, exchange, or other shares of stock listed and traded through
Page 56 of 139
disposition of shares of stock listed the local stock exchange other than the sale
and traded through the local stock by a dealer in securities, a tax at the rate of
exchange other than the sale by a [one-half] SIX-TENTHS of one percent
dealer in securities, a tax at the [(1/2 of 1%)] (6/10 of 1%) of the gross
rate of one-half of one percent (1/2 selling price or gross value in money of the
of 1%) of the gross selling price or shares of stock sold, bartered, exchanged or
gross value in money of the shares otherwise disposed which shall be paid by
of stock sold, bartered, exchanged the seller or transferor.
or otherwise disposed which shall
be paid by the seller or transferor.
8. Returns and SEC. 128. Returns and Payment of SEC. 128. Returns and Payment of Removes the authority given to the
payment of Percentage Taxes. - Percentage Taxes. – Commissioner of Internal Revenue to
percentage taxes prescribe the time for filing of the percentage
[Section (A) x x x (A) x x x tax return at intervals other than the time
128(A)(3)] prescribed under Section 128(A)(a) of the Tax
(1) x x x (1) x x x Code.

(2) x x x (2) x x x

(3) Exceptions. - The Commissioner [(3) Exceptions. – The Commissioner may,


may, by rules and regulations, by rules and regulations, prescribe:
prescribe:

(a) The time for filing the return at (a) The time for filing the return at intervals
intervals other than the time other than the time prescribed in the
prescribed in the preceding preceding paragraphs for a particular class
paragraphs for a particular class or or classes of taxpayers after considering
classes of taxpayers after such factors as volume of sales, financial
considering such factors as volume conditions, adequate measures of security,
of sales, financial condition, and such other relevant information required
adequate measures of security, and to be submitted under the pertinent
such other relevant information provisions of this Code; and
required to be submitted under the
pertinent provisions of this Code;
and

(b) The manner and time of (b) The manner and time of payment of
payment of percentage taxes other percentage taxes other than as hereinabove
Page 57 of 139
than as hereinabove prescribed, prescribed, including a scheme of tax
including a scheme of tax prepayment.]
prepayment.

Page 58 of 139
V. Excise Taxes
Tax Code Present Provision TRAIN Amendment Reform Measure
Provision
1. General SEC. 129. Goods Subject to Excise Taxes. – SEC.129. Goods AND SERVICES Subject to Clarifies that excise tax covers not only
provisions Excise taxes apply to goods manufactured or Excise Taxes. - Excise taxes apply to goods goods manufactured or produced in the
[Section produced in the Philippines for domestic manufactured or produced in the Philippines Philippines for domestic sales or
129] sales or consumption or for any other for domestic sales or consumption or for any consumption but also services performed in
disposition and to things imported. The other disposition and to things imported[.] the Philippines
excise tax imposed herein shall be in addition AS WELL AS SERVICES PERFORMED IN
to the value-added tax imposed under Title THE PHILIPPINES. The excise tax imposed
IV. herein shall be in addition to the value-
added tax imposed under Title IV.

For purposes of this Title, excise taxes herein For purposes of this Title, excise taxes
imposed and based on weight or volume herein imposed and based on weight or
capacity or any other physical unit of volume capacity or any other physical unit
measurement shall be referred to as ‘specific of measurement shall be referred to as
tax’ and an excise tax herein imposed and 'specific tax' and an excise tax herein
based on selling price or other specified imposed and based on selling price or other
value of the good shall be referred to as ‘ad specified value of the good OR SERVICE
valorem tax.’ PERFORMED shall be referred to as 'ad
valorem tax.'

Page 59 of 139
2. Excise tax SEC. 145. Cigars and Cigarettes. – Sec. 145. Cigars and Cigarettes. – Increases the excise tax on cigarettes from
on cigarettes P30.00 to P32.5 per pack from 01 January
[Section (A) Cigars. – xxx (A) Cigars. - xxx 2018 to 30 June 2018, P35.0 from 01 July
145] 2018 to 31 December 2019, P37.50 from
(B) Cigarettes Packed by Hand. – There shall (B) Cigarettes Packed by Hand. – There 01 January 2020 to 31 December 2021,
be levied, assessed and collected on shall be levied, assessed and collected on and P40 from 01 January 2022 to 31
cigarettes packed by hand an excise tax cigarettes packed by hand an excise tax December 2023.
based on the following schedules: based on the following schedules:

Effective on January 1, 2013, Twelve pesos [Effective on January 1, 2013, Twelve pesos
(P12.00) per pack; (P12.00) per pack;

Effective on January 1, 2014, Fifteen pesos Effective on January 1, 2014, Fifteen pesos
(P15.00) per pack; (P15.00) per pack;

Effective on January 1, 2015, Eighteen pesos Effective on January 1, 2015, Eighteen


(P18.00) per pack; pesos (P18.00) per pack;

Effective on January 1, 2016, Twenty-one Effective on January 1, 2016, Twenty-one


pesos (P21.00) per pack; and pesos (P21.00) per pack; and

Effective on January 1, 2017, Thirty pesos Effective on January 1, 2017, Thirty pesos
(P30.00) per pack. (P30.00) per pack.]

EFFECTIVE ON JANUARY 1, 2018


UNTIL JUNE 30, 2018, THIRTY TWO
PESOS AND FIFTY CENTAVOS (P32.50)
PER PACK;

EFFECTIVE ON JULY 1, 2018 UNTIL


DECEMBER 31, 2019, THIRTY FIVE
PESOS (P35.00) PER PACK;

EFFECTIVE ON JANUARY 1, 2020


UNTIL DECEMBER 31, 2021, THIRTY
SEVEN PESOS AND FIFTY CENTAVOS
(P37.50) PER PACK;

Page 60 of 139
EFFECTIVE ON JANUARY 1, 2022
The rates of tax imposed under this UNTIL DECEMBER 31, 2023, FORTY
subsection shall be increased by four PESOS (P40.00) PER PACK;
percent (4%) every year effective on
January 1, 2018, through revenue The rates of tax imposed under this
regulations issued by the Secretary of subsection shall be increased by four
Finance. percent (4%) every year effective on
January 1, [2018] 2024, through revenue
Duly registered cigarettes packed by hand regulations issued by the Secretary of
shall only be packed in twenties and other Finance.
packaging combinations of not more than
twenty. Duly registered cigarettes packed by hand
shall only be packed in twenties and other
‘Cigarettes packed by hand’ shall refer to packaging combinations of not more than
the manner of packaging of cigarettes sticks twenty.
using an individual person’s hands and not
through any other means such as a 'Cigarettes packed by hand' shall refer to
mechanical device, machine or equipment. the manner of packaging of cigarette sticks
using an individual person's hands and not
(C) Cigarettes Packed by Machine. – There through any other means such as a
shall be levied, assessed and collected on mechanical device, machine or equipment.
cigarettes packed by machine a tax at the
rates prescribed below: (C) Cigarettes Packed by Machine. - There
shall be levied, assessed and collected on
Effective on January 1, 2013 cigarettes packed by machine a tax at the
rates prescribed below:
(1) If the net retail price (excluding the
excise tax and the value-added tax) is Eleven [Effective on January 1, 2013
pesos and fifty centavos (P11.50) and below
per pack, the tax shall be Twelve pesos (1) If the net retail price (excluding the
(P12.00) per pack; and excise tax and the value-added tax) is
Eleven pesos and fifty centavos (P11.50)
(2) If the net retail price (excluding the and below per pack, the tax shall be Twelve
excise tax and the value-added tax) is more pesos (P12.00) per pack; and
than Eleven pesos and fifty centavos
(P11.50) per pack, the tax shall be Twenty- (2) If the net retail price (excluding the
five pesos (P25.00) per pack. excise tax and the value-added tax) is more
than Eleven pesos and fifty centavos
Page 61 of 139
Effective on January 1, 2014 (P11.50) per pack, the tax shall be Twenty-
five pesos (P25.00) per pack.
(1) If the net retail price (excluding the
excise tax and the value-added tax) is Eleven Effective on January 1, 2014
pesos and fifty centavos (P11.50) and below
per pack, the tax shall be Seventeen pesos (1) If the net retail price (excluding the
(P17.00) per pack; and excise tax and the value-added tax) is
Eleven pesos and fifty centavos (P11.50)
(2) If the net retail price (excluding the and below per pack, the tax shall be
excise tax and the value-added tax) is more Seventeen pesos (P17.00) per pack; and
than Eleven pesos and fifty centavos
(P11.50) per pack, the tax shall be Twenty- (2) If the net retail price (excluding the
seven pesos (P27.00) per pack. excise tax and the value-added tax) is more
than Eleven pesos and fifty centavos
Effective on January 1, 2015 (P11.50) per pack, the tax shall be Twenty-
seven pesos (P27.00) per pack.
(1) If the net retail price (excluding the
excise tax and the value-added tax) is Eleven Effective on January 1, 2015
pesos and fifty centavos (P11.50) and below
per pack, the tax shall be Twenty-one pesos (1) If the net retail price (excluding the
(P21.00) per pack; and excise tax and the value-added tax) is
Eleven pesos and fifty centavos (P11.50)
(2) If the net retail price (excluding the and below per pack, the tax shall be
excise tax and the value-added tax) is more Twenty-one pesos (P21.00) per pack; and
than Eleven pesos and fifty centavos
(P11.50) per pack, the tax shall be Twenty- (2) If the net retail price (excluding the
eight pesos (P28.00) per pack. excise tax and the value-added tax) is more
than Eleven pesos and fifty centavos
Effective on January 1, 2016 (P11.50) per pack, the tax shall be Twenty-
eight pesos (P28.00) per pack.
(1) If the net retail price (excluding the
excise tax and the value-added tax) is Eleven Effective on January 1, 2016
pesos and fifty centavos (P11.50) and below
per pack, the tax shall be Twenty-five pesos (1) If the net retail price (excluding the
(P25.00) per pack; and excise tax and the value-added tax) is
Eleven pesos and fifty centavos (P11.50)
(2) If the net retail price (excluding the and below per pack, the tax shall be
excise tax and the value-added tax) is more Twenty-five pesos (P25.00) per pack; and
Page 62 of 139
than Eleven pesos and fifty centavos
(P11.50) per pack, the tax shall be Twenty- (2) If the net retail price (excluding the
nine pesos (P29.00) per pack. excise tax and the value-added tax) is more
than Eleven pesos and fifty centavos
Effective on January 1, 2017, the tax on all (P11.50) per pack, the tax shall be Twenty-
cigarettes packed by machine shall be Thirty nine pesos (P29.00) per pack.
pesos (P30.00) per pack.
Effective on January 1, 2017, the tax on all
cigarettes packed by machine shall be Thirty
pesos 13 (P30.00) per pack.]

EFFECTIVE ON JANUARY 1, 2018


UNTIL JUNE 30, 2018, THE TAX ON ALL
CIGARETTES PACKED BY MACHINE
SHALL BE THIRTY TWO PESOS AND
FIFTY CENTAVOS (P32.50) PER PACK;

EFFECTIVE ON JULY 1, 2018 UNTIL


DECEMBER 31, 2019, THE TAX ON ALL
CIGARETTES PACKED BY MACHINE
SHALL BE THIRTY FIVE PESOS (P35.00)
PER PACK;

EFFECTIVE ON JANUARY 1, 2020


UNTIL DECEMBER 31, 2021, THE TAX
ON ALL CIGARETTES PACKED BY
MACHINE SHALL BE THIRTY SEVEN
PESOS AND FIFTY CENTAVOS (P37.50)
PER PACK;

EFFECTIVE ON JANUARY 1, 2022


UNTIL DECEMBER 31, 2023, THE TAX
ON ALL CIGARETTES PACKED BY
MACHINE SHALL BE FORTY PESOS
(P40.00) PER PACK;

The rates of tax imposed under this The rates of tax imposed under this
subsection shall be increased by four subsection shall be increased by four
Page 63 of 139
percent (4%) every year thereafter percent (4%) every year thereafter effective
effective on January 1, 2018, through on January 1, [2018] 2024, through
revenue regulations issued by the Secretary revenue regulations issued by the Secretary
of Finance. of Finance.

Page 64 of 139
3. Excise tax SEC. 148. Manufactured Oils and Other SEC. 148. Manufactured Oils and Other Petroleum Proposed Excise Tax
on Fuels. – There shall be collected on refined Fuels. – There shall be collected on refined product/current Rates
petroleum and manufactured mineral oils and motor and manufactured mineral oils and motor excise tax 2018 2019 2020
products fuels, the following excise taxes which shall fuels, the following excise taxes which shall Lubricating oils P8.0 P9.0 P10.0
attach to the goods hereunder enumerated attach to the goods hereunder enumerated and greases -
as soon as they are in existence as such: as soon as they are in existence as such: P4.50
Processed gas - P8.0 P9.0 P10.0
EFFECTIVE JANUARY 1, 2018 0.05
Waxes and P8.0 P9.0 P10.0
(a) Lubricating oils and greases, including (a) Lubricating oils and greases, including petrolatum –
but not limited to, basestock for lube oils and but not limited to, basestock for lube oils P3.50
greases, high vacuum distillates, aromatic and greases, high vacuum distillates, Denatured P8.0 P9.0 P10.0
extracts and other similar preparations, and aromatic extracts and other similar alcohol for
additives for lubricating oils and greases, preparations, and additives for lubricating motive power –
whether such additives are petroleum based oils and greases, whether such additives are P0.05)
or not, per liter and kilogram, respectively, petroleum based or not, per liter and Naptha, regular P7.0 P9.0 P10.0
of volume capacity or weight, Four pesos and kilogram, respectively, of volume capacity or gasoline,
fifty centavos (P4.50): Provided, however, weight, [Four pesos and fifty centavos pyrolysis
That the excise taxes paid on the purchased (P4.50)] EIGHT PESOS P8.00):[Provided, gasoline – P4.35
feedstock (bunker) used in the manufacture however, That the excise taxes paid on the Leaded P7.0 P9.0 P10.0
of excisable articles and forming part thereof purchased feedstock (bunker) used in the premium
shall be credited against the excise tax due manufacture of excisable articles and gasoline – P5.35
therefrom: Provided, further, That forming part thereof shall be credited Unleaded P7.0 P9.0 P10.0
lubricating oils and greases produced from against the excise tax due therefrom:] premium
basestocks and additives on which the excise Provided, [further,] That lubricating oils and gasoline – P4.35
tax has already been paid shall no longer be greases produced from basestocks and Aviation turbo P4.0 P4.0 P4.0
subject to excise tax: Provided, finally, That additives on which the excise tax has jet fuel – P3.67
locally produced or imported oils previously already been paid shall no longer be subject
Kerosene – P0.0 P3.0 P4.0 P5.0
taxed as such but are subsequently to excise tax: Provided, [finally,] FURTHER,
Diesel fuel- P0.0 P2.5 P4.5 P6.0
reprocessed, rerefined or recycled shall That locally produced or imported oils
Liquefied P1.0 P2.0 P3.0
likewise be subject to the tax imposed under previously taxed as such but are
petroleum gas –
this Section. subsequently reprocessed, refined or
P0.00
recycled shall likewise be subject to the tax
Asphalts –P0.56 P8.0 P9.0 P10.0
imposed under this [Section]
Bunker fuel - P2.50 P4.5 P6.0
SUBSECTION.
P0.0
Petroleum Coke P2.50 P4.50 P6.0

Page 65 of 139
(b) Processed gas, per liter of volume (b) Processed gas, per liter of volume
capacity, Five centavos (P0.05); capacity, [Five centavos (P0.05)] EIGHT
PESOS (P8.00);

(c) Waxes and petrolatum, per kilogram, (c) Waxes and petrolatum, per kilogram,
Three pesos and fifty centavos (P3.50); [Three pesos and fifty centavos (P3.50)]
EIGHT PESOS (P8.00);

(d) On denatured alcohol to be used for (d) On denatured alcohol to be used for
motive power, per liter of volume capacity, motive power, per liter of volume capacity,
Five centavos (P0.05): Provided, That unless [Five centavos (P0.05)] EIGHT PESOS
otherwise provided by special laws, if the (P8.00): Provided, That unless otherwise
denatured alcohol is mixed with gasoline, the provided by special laws, if the denatured
excise tax on which has already been paid, alcohol is mixed with gasoline, the excise
only the alcohol content shall be subject to tax on which has already been paid, only the
the tax herein prescribed. For purposes of alcohol content shall be subject to the tax
this Subsection, the removal of denatured herein prescribed. For purposes of this
alcohol of not less than one hundred eighty Subsection, the removal of denatured
degrees (180o) proof (ninety percent (90%) alcohol of not less than one hundred eighty
absolute alcohol) shall be deemed to have degrees (180°) proof (ninety percent (90%)
been removed for motive power, unless absolute alcohol) shall be deemed to have
shown otherwise; been removed for motive power, unless
shown otherwise;

(e) Naphtha, regular gasoline and other (e) Naphtha, regular gasoline, PYROLYSIS
similar products of distillation, per liter of GASOLINE and other similar products of
volume capacity, Four pesos and thirty-five distillation, per liter of volume capacity,
centavos (P4.35): Provided, however, That [Four pesos and thirty-five centavos
naphtha, when used as a raw material in the (P4.35)] SEVEN PESOS (P7.00):
production of petrochemical products or as Provided, however, That naphtha AND
replacement fuel for natural-gas-fired- PYROLYSIS GASOLINE, when used as a
combined cycle power plant, in lieu of locally- raw material in the production of
extracted natural gas during the non- petrochemical products, OR IN THE
availability thereof, subject to the rules and REFINING OF PETROLEUM PRODUCTS,
regulations to be promulgated by the or as replacement fuel for natural-gas-fired-
Secretary of Energy, in consultation with the combined cycle power plant[,] in lieu of
Secretary of Finance, per liter of volume locally-extracted natural gas during the non-
capacity, zero (P0.00): Provided, further, availability thereof, subject to the rules and
Page 66 of 139
That the by-product including fuel oil, diesel regulations to be promulgated by the
fuel, kerosene, pyrolysis gasoline, liquefied [Secretary of Energy, in consultation with
petroleum gases and similar oils having the] Secretary of Finance, per liter of
more or less the same generating power, volume capacity, zero (P0.00): Provided,
which are produced in the processing of further, That THE PRODUCTION OF
naphtha into petrochemical products shall be PETROLEUM PRODUCTS, WHETHER OR
subject to the applicable excise tax specified NOT THEY ARE CLASSIFIED AS
in this Section, except when such by- PRODUCTS OF DISTILLATION AND FOR
products are transferred to any of the local USE SOLELY FOR THE PRODUCTION OF
oil refineries through sale, barter or GASOLINE SHALL BE EXEMPT FROM
exchange, for the purpose of further EXCISE TAX: PROVIDED,
processing or blending into finished products FURTHERMORE, THAT the by-product
which are subject to excise tax under this including fuel oil, diesel fuel, kerosene,
Section; pyrolysis gasoline, liquefied petroleum
gases, and similar oils having more or less
the same generating power, which are
produced in the processing of naphtha into
petrochemical products shall be subject to
the applicable excise tax specified in this
Section, except when such by-products are
transferred to any of the local oil refineries
through sale, barter or exchange, for the
purpose of further processing or blending
into finished products which are subject to
excise tax under this Section;

(f) Leaded premium gasoline, per liter of (f) [Leaded premium gasoline, per liter of
volume capacity, Five pesos and thirty-five volume capacity, Five pesos and thirty-five
centavos (P5.35); unleaded premium centavos (P5.35);] [u]Unleaded premium
gasoline, per liter of volume capacity, Four gasoline, per liter of volume capacity, [Four
pesos and thirty-five centavos (P4.35); pesos and thirty-five centavos (P4.35);]
SEVEN PESOS (P7.00);

(g) Aviation turbo jet fuel, per liter of volume (g) Aviation turbo jet fuel, AVIATION GAS,
capacity, Three pesos and sixty-seven per liter of volume capacity, [Three pesos
centavos (P3.67); and sixty-seven centavos (P3.67)] FOUR
PESOS (P4.00);

Page 67 of 139
(h) Kerosene, per liter of volume capacity, (h) Kerosene, per liter of volume capacity,
zero (P0.00): Provided, That kerosene, when [zero (P0.00)] THREE PESOS (P3.00):
used as aviation fuel, shall be subject to the Provided, That kerosene, when used as
same tax on aviation turbo jet fuel under the aviation fuel, shall be subject to the same
preceding paragraph (g), such tax to be tax on aviation turbo jet fuel under the
assessed on the user thereof; preceding paragraph (g), such tax to be
assessed on the user thereof;

(i) Diesel fuel oil, and on similar fuel oils (i) Diesel fuel oil, and on similar fuel oils
having more or less the same generating having more or less the same generating
power, per liter of volume capacity, zero power, per liter of volume capacity, [zero
(P0.00); (P0.00)] TWO PESOS AND FIFTY
CENTAVOS (P2.50);

(j) Liquefied petroleum gas, per liter, zero (j) Liquefied petroleum gas, per
(P0.00): Provided, That liquefied petroleum KILOGRAM, [zero (P0.00)] ONE PESO
gas used for motive power shall be taxed at (P1.00): PROVIDED, THAT LIQUEFIED
the equivalent rate as the excise tax on PETROLEUM GAS WHEN USED AS RAW
diesel fuel oil; MATERIAL IN THE PRODUCTION OF
PETROCHEMICAL PRODUCTS, SUBJECT
TO THE RULES AND REGULATIONS TO
BE PROMULGATED BY THE SECRETARY
OF FINANCE, SHALL BE TAXED ZERO
(P0.00) PER KILOGRAM:

Provided, FINALLY, That liquefied


petroleum gas used for motive power shall
be taxed at the equivalent rate as the excise
tax on diesel fuel oil;

(k) Asphalts, per kilogram, Fifty-six centavos (k) Asphalts, per kilogram, [Fifty-six
(P0.56); and centavos (P0.56)] EIGHT PESOS (P8.00);

(l) Bunker fuel oil, and on similar fuel oils (l) Bunker fuel oil, and on similar fuel oils
having more or less the same generating having more or less the same generating
power, per liter of volume capacity, zero power, per liter of volume capacity, [zero
(P0.00). (P0.00).] TWO PESOS AND FIFTY
CENTAVOS (P2.50): PROVIDED,
Page 68 of 139
HOWEVER, THAT THE EXCISE TAXES
PAID ON THE PURCHASED BASESTOCK
(BUNKER) USED IN THE MANUFACTURE
OF EXCISABLE ARTICLES AND FORMING
PART THEREOF SHALL BE CREDITED
AGAINST THE EXCISE TAX DUE
THEREFROM; AND

(M) PETROLEUM COKE, PER METRIC


TON, TWO PESOS AND FIFTY CENTAVOS
(P2.50): PROVIDED, HOWEVER, THAT,
PETROLEUM COKE, WHEN USED AS
FEEDSTOCK TO ANY POWER
GENERATING FACILITY, PER METRIC
TON, ZERO (P0.00).

EFFECTIVE JANUARY 1, 2019

(A) LUBRICATING OILS AND GREASES,


INCLUDING BUT NOT LIMITED TO,
BASESTOCK FOR LUBE OILS AND
GREASES, HIGH VACUUM DISTILLATES,
AROMATIC EXTRACTS AND OTHER
SIMILAR PREPARATIONS, AND
ADDITIVES FOR LUBRICATING OILS
AND GREASES, WHETHER SUCH
ADDITIVES ARE PETROLEUM BASED OR
NOT, PER LITER AND KILOGRAM,
RESPECTIVELY, OF VOLUME CAPACITY
OR WEIGHT, NINE PESOS (P9.00):
PROVIDED, THAT LUBRICATING OILS
AND GREASES PRODUCED FROM
BASESTOCKS AND ADDITIVES ON
WHICH THE EXCISE TAX HAS ALREADY
BEEN PAID SHALL NO LONGER BE
SUBJECT TO EXCISE TAX: PROVIDED,
FURTHER, THAT LOCALLY PRODUCED
OR IMPORTED OILS PREVIOUSLY
Page 69 of 139
TAXED AS SUCH BUT ARE
SUBSEQUENTLY REPROCESSED,
REREFINED OR RECYCLED SHALL
LIKEWISE BE SUBJECT TO THE TAX
IMPOSED UNDER THIS SUBSECTION.

(B) PROCESSED GAS, PER LITER OF


VOLUME CAPACITY, NINE PESOS
(P9.00);

(C) WAXES AND PETROLATUM, PER


KILOGRAM, NINE PESOS (P9.00);

(D) ON DENATURED ALCOHOL TO BE


USED FOR MOTIVE POWER, PER LITER
OF VOLUME CAPACITY, NINE PESOS
(P9.00): PROVIDED, THAT UNLESS
OTHERWISE PROVIDED BY SPECIAL
LAWS, IF THE DENATURED ALCOHOL IS
MIXED WITH GASOLINE, THE EXCISE
TAX ON WHICH HAS ALREADY BEEN
PAID, ONLY THE ALCOHOL CONTENT
SHALL BE SUBJECT TO THE TAX HEREIN
PRESCRIBED. FOR PURPOSES OF THIS
SUBSECTION, THE REMOVAL OF
DENATURED ALCOHOL OF NOT LESS
THAN ONE HUNDRED EIGHTY DEGREES
(180°) PROOF (NINETY PERCENT
(90%) ABSOLUTE ALCOHOL) SHALL BE
DEEMED TO HAVE BEEN REMOVED FOR
MOTIVE POWER, UNLESS SHOWN
OTHERWISE;

(E) NAPHTHA, REGULAR GASOLINE,


PYROLYSIS GASOLINE, AND OTHER
SIMILAR PRODUCTS OF DISTILLATION,
PER LITER OF VOLUME CAPACITY, NINE
PESOS (P9.00): PROVIDED, HOWEVER,

Page 70 of 139
THAT NAPHTHA AND PYROLYSIS
GASOLINE, WHEN USED AS A RAW
MATERIAL IN THE PRODUCTION OF
PETROCHEMICAL PRODUCTS, OR IN
THE REFINING OF PETROLEUM
PRODUCTS, OR AS REPLACEMENT FUEL
FOR NATURAL-GAS-FIRED-COMBINED
CYCLE POWER PLANT IN LIEU OF
LOCALLY-EXTRACTED NATURAL GAS
DURING THE NON-AVAILABILITY
THEREOF, SUBJECT TO THE RULES AND
REGULATIONS TO BE PROMULGATED BY
THE SECRETARY OF FINANCE, PER
LITER OF VOLUME CAPACITY, ZERO
(P0.00): PROVIDED, FURTHER, THAT
THE PRODUCTION OF PETROLEUM
PRODUCTS, WHETHER OR NOT THEY
ARE CLASSIFIED AS PRODUCTS OF
DISTILLATION AND FOR USE SOLELY
FOR THE PRODUCTION OF GASOLINE
SHALL BE EXEMPT FROM EXCISE TAX:
PROVIDED, FURTHERMORE, THAT THE
BY-PRODUCT INCLUDING FUEL OIL,
DIESEL FUEL, KEROSENE, PYROLYSIS
GASOLINE, LIQUEFIED PETROLEUM
GASES AND SIMILAR OILS HAVING
MORE OR LESS THE SAME GENERATING
POWER, WHICH ARE PRODUCED IN THE
PROCESSING OF NAPHTHA INTO
PETROCHEMICAL PRODUCTS SHALL BE
SUBJECT TO THE APPLICABLE EXCISE
TAX SPECIFIED IN THIS SECTION,
EXCEPT WHEN SUCH BY-PRODUCTS ARE
TRANSFERRED TO ANY OF THE LOCAL
OIL REFINERIES THROUGH SALE,
BARTER OR EXCHANGE, FOR THE
PURPOSE OF FURTHER PROCESSING OR
BLENDING INTO FINISHED PRODUCTS
Page 71 of 139
WHICH ARE SUBJECT TO EXCISE TAX
UNDER THIS SECTION;

(F) UNLEADED PREMIUM GASOLINE,


PER LITER OF VOLUME CAPACITY, NINE
PESOS (P9.00);

(G) AVIATION TURBO JET FUEL,


AVIATION GAS, PER LITER OF VOLUME
CAPACITY, FOUR PESOS (P4.00);

(H) KEROSENE, PER LITER OF VOLUME


CAPACITY, FOUR PESOS (P4.00):
PROVIDED, THAT KEROSENE, WHEN
USED AS AVIATION FUEL, SHALL BE
SUBJECT TO THE SAME TAX ON
AVIATION TURBO JET FUEL UNDER THE
PRECEDING PARAGRAPH (G), SUCH TAX
TO BE ASSESSED ON THE USER
THEREOF;

(I) DIESEL FUEL OIL, AND ON SIMILAR


FUEL OILS HAVING MORE OR LESS THE
SAME GENERATING POWER, PER LITER
OF VOLUME CAPACITY, FOUR PESOS
AND FIFTY CENTAVOS (P4.50);

(J) LIQUEFIED PETROLEUM GAS, PER


KILOGRAM, TWO PESOS (P2.00):
PROVIDED, THAT LIQUEFIED
PETROLEUM GAS WHEN USED AS RAW
MATERIAL IN THE PRODUCTION OF
PETROCHEMICAL PRODUCTS, SUBJECT
TO THE RULES AND REGULATIONS TO
BE PROMULGATED BY THE SECRETARY
OF FINANCE, PER KILOGRAM, ZERO
(P0.00): PROVIDED, FINALLY, THAT
LIQUEFIED PETROLEUM GAS USED FOR

Page 72 of 139
MOTIVE POWER SHALL BE TAXED AT
THE EQUIVALENT RATE AS THE EXCISE
TAX ON DIESEL FUEL OIL;

(K) ASPHALTS, PER KILOGRAM, NINE


PESOS (P9.00);

(L) BUNKER FUEL OIL, AND ON


SIMILAR FUEL OILS HAVING MORE OR
LESS THE SAME GENERATING POWER,
PER LITER OF VOLUME CAPACITY, FOUR
PESOS AND FIFTY CENTAVOS (P4.50):
PROVIDED, HOWEVER, THAT THE
EXCISE TAXES PAID ON THE
PURCHASED BASESTOCK (BUNKER)
USED IN THE MANUFACTURE OF
EXCISABLE ARTICLES AND FORMING
PART THEREOF SHALL BE CREDITED
AGAINST THE EXCISE TAX DUE
THEREFROM; AND

(M) PETROLEUM COKE, PER METRIC


TON, FOUR PESOS AND FIFTY
CENTAVOS (P4.50): PROVIDED,
HOWEVER, THAT, PETROLEUM COKE,
WHEN USED AS FEEDSTOCK TO ANY
POWER GENERATING FACILITY, PER
METRIC TON, ZERO (P0.00).

EFFECTIVE JANUARY 1, 2020

(A) LUBRICATING OILS AND GREASES,


INCLUDING BUT NOT LIMITED TO,
BASESTOCK FOR LUBE OILS AND
GREASES, HIGH VACUUM DISTILLATES,
AROMATIC EXTRACTS AND OTHER
SIMILAR PREPARATIONS, AND
ADDITIVES FOR LUBRICATING OILS
Page 73 of 139
AND GREASES, WHETHER SUCH
ADDITIVES ARE PETROLEUM BASED OR
NOT, PER LITER AND KILOGRAM,
RESPECTIVELY, OF VOLUME CAPACITY
OR WEIGHT, TEN PESOS (P10.00):
PROVIDED, THAT LUBRICATING OILS
AND GREASES PRODUCED FROM
BASESTOCKS AND ADDITIVES ON
WHICH THE EXCISE TAX HAS ALREADY
BEEN PAID SHALL NO LONGER BE
SUBJECT TO EXCISE TAX: PROVIDED,
FURTHER, THAT LOCALLY PRODUCED
OR IMPORTED OILS PREVIOUSLY
TAXED AS SUCH BUT ARE
SUBSEQUENTLY REPROCESSED,
REREFINED OR RECYCLED SHALL
LIKEWISE BE SUBJECT TO THE TAX
IMPOSED UNDER THIS SUBSECTION.

(B) PROCESSED GAS, PER LITER OF


VOLUME CAPACITY, TEN PESOS
(P10.00);

(C) WAXES AND PETROLATUM, PER


KILOGRAM, TEN PESOS (P10.00);

(D) ON DENATURED ALCOHOL TO BE


USED FOR MOTIVE POWER, PER LITER
OF VOLUME CAPACITY, TEN PESOS
(P10.00): PROVIDED, THAT UNLESS
OTHERWISE PROVIDED BY SPECIAL
LAWS, IF THE DENATURED ALCOHOL IS
MIXED WITH GASOLINE, THE EXCISE
TAX ON WHICH HAS ALREADY BEEN
PAID, ONLY THE ALCOHOL CONTENT
SHALL BE SUBJECT TO THE TAX HEREIN
PRESCRIBED. FOR PURPOSES OF THIS
SUBSECTION, THE REMOVAL OF

Page 74 of 139
DENATURED ALCOHOL OF NOT LESS
THAN ONE HUNDRED EIGHTY DEGREES
(180°) PROOF (NINETY PERCENT
(90%) ABSOLUTE ALCOHOL) SHALL BE
DEEMED TO HAVE BEEN REMOVED FOR
MOTIVE POWER, UNLESS SHOWN
OTHERWISE;

(E) NAPHTHA, REGULAR GASOLINE,


PYROLYSIS GASOLINE AND OTHER
SIMILAR PRODUCTS OF DISTILLATION,
PER LITER OF VOLUME CAPACITY, TEN
PESOS (P10.00): PROVIDED, HOWEVER,
THAT NAPHTHA AND PYROLYSIS
GASOLINE, WHEN USED AS A RAW
MATERIAL IN THE PRODUCTION OF
PETROCHEMICAL PRODUCTS, OR IN
THE REFINING OF PETROLEUM
PRODUCTS OR AS REPLACEMENT FUEL
FOR NATURAL-GAS-FIRED-COMBINED
CYCLE POWER PLANT IN LIEU OF
LOCALLY-EXTRACTED NATURAL GAS
DURING THE NON-AVAILABILITY
THEREOF, SUBJECT TO THE RULES AND
REGULATIONS TO BE PROMULGATED BY
THE SECRETARY OF FINANCE, PER
LITER OF VOLUME CAPACITY, ZERO
(P0.00): PROVIDED, FURTHER, THAT
THE PRODUCTION OF PETROLEUM
PRODUCTS, WHETHER OR NOT THEY
ARE CLASSIFIED AS PRODUCTS OF
DISTILLATION AND FOR USE SOLELY
FOR THE PRODUCTION OF GASOLINE
SHALL BE EXEMPT FROM EXCISE TAX:
PROVIDED, FURTHERMORE, THAT THE
BY-PRODUCT INCLUDING FUEL OIL,
DIESEL FUEL, KEROSENE, PYROLYSIS
GASOLINE, LIQUEFIED PETROLEUM
Page 75 of 139
GASES AND SIMILAR OILS HAVING
MORE OR LESS THE SAME GENERATING
POWER, WHICH ARE PRODUCED IN THE
PROCESSING OF NAPHTHA INTO
PETROCHEMICAL PRODUCTS SHALL BE
SUBJECT TO THE APPLICABLE EXCISE
TAX SPECIFIED IN THIS SECTION,
EXCEPT WHEN SUCH BY-PRODUCTS ARE
TRANSFERRED TO ANY OF THE LOCAL
OIL REFINERIES THROUGH SALE,
BARTER OR EXCHANGE, FOR THE
PURPOSE OF FURTHER PROCESSING OR
BLENDING INTO FINISHED PRODUCTS
WHICH ARE SUBJECT TO EXCISE TAX
UNDER THIS SECTION;

(F) UNLEADED PREMIUM GASOLINE,


PER LITER OF VOLUME CAPACITY, TEN
PESOS (P10.00);

(G) AVIATION TURBO JET FUEL,


AVIATION GAS, PER LITER OF VOLUME
CAPACITY, FOUR PESOS (P4.00);

(H) KEROSENE, PER LITER OF VOLUME


CAPACITY, FIVE PESOS (P5.00):
PROVIDED, THAT KEROSENE, WHEN
USED AS AVIATION FUEL, SHALL BE
SUBJECT TO THE SAME TAX ON
AVIATION TURBO JET FUEL UNDER THE
PRECEDING PARAGRAPH (G), SUCH TAX
TO BE ASSESSED ON THE USER
THEREOF;

(I) DIESEL FUEL OIL, AND ON SIMILAR


FUEL OILS HAVING MORE OR LESS THE
SAME GENERATING POWER, PER LITER

Page 76 of 139
OF VOLUME CAPACITY, SIX PESOS
(P6.00);

(J) LIQUEFIED PETROLEUM GAS, PER


KILOGRAM, THREE PESOS (P3.00):
PROVIDED, THAT LIQUEFIED
PETROLEUM GAS WHEN USED AS RAW
MATERIAL IN THE PRODUCTION OF
PETROCHEMICAL PRODUCTS, SUBJECT
TO THE RULES AND REGULATIONS TO
BE PROMULGATED BY THE SECRETARY
OF FINANCE, PER KILOGRAM, ZERO
(P0.00): PROVIDED, FINALLY, THAT
LIQUEFIED PETROLEUM GAS USED FOR
MOTIVE POWER SHALL BE TAXED AT
THE EQUIVALENT RATE AS THE EXCISE
TAX ON DIESEL FUEL OIL;

(K) ASPHALTS, PER KILOGRAM, TEN


PESOS (P10.00);

(L) BUNKER FUEL OIL, AND ON


SIMILAR FUEL OILS HAVING MORE OR
LESS THE SAME GENERATING POWER,
PER LITER OF VOLUME CAPACITY, SIX
PESOS (P6.00): PROVIDED, HOWEVER,
THAT THE EXCISE TAXES PAID ON THE
PURCHASED BASESTOCK (BUNKER)
USED IN THE MANUFACTURE OF
EXCISABLE ARTICLES AND FORMING
PART THEREOF SHALL BE CREDITED
AGAINST THE EXCISE TAX DUE
THEREFROM; AND

(M) PETROLEUM COKE, PER METRIC


TON, SIX PESOS (P6.00): PROVIDED,
HOWEVER, THAT, PETROLEUM COKE,
WHEN USED AS FEEDSTOCK TO ANY

Page 77 of 139
POWER GENERATING FACILITY, PER
METRIC TON, ZERO (P0.00).

PETROLEUM PRODUCTS, INCLUDING


NAPHTHA, LPG, PETROLEUM COKE,
REFINERY FUEL AND OTHER PRODUCTS
OF DISTILLATION, WHEN USED AS
INPUT, FEEDSTOCK OR AS RAW
MATERIAL IN THE MANUFACTURING OF
PETROCHEMICAL PRODUCTS, OR IN
THE REFINING OF PETROLEUM
PRODUCTS, OR AS REPLACEMENT FUEL
FOR NATURAL-GAS-FIRED-COMBINED
CYCLE POWER PLANT[,] IN LIEU OF
LOCALLY-EXTRACTED NATURAL GAS
DURING THE NON-AVAILABILITY
THEREOF, SUBJECT TO THE RULES AND
REGULATIONS TO BE PROMULGATED
BY THE SECRETARY OF FINANCE, PER
LITER OF VOLUME CAPACITY, ZERO
(P0.00); FURTHERMORE, THAT THE BY-
PRODUCT INCLUDING FUEL OIL, DIESEL
FUEL, KEROSENE, PYROLYSIS
GASOLINE, LIQUEFIED PETROLEUM
GASES, AND SIMILAR OILS HAVING
MORE OR LESS THE SAME GENERATING
POWER, WHICH ARE PRODUCED IN THE
PROCESSING OF NAPHTHA INTO
PETROCHEMICAL PRODUCTS SHALL BE
SUBJECT TO THE APPLICABLE EXCISE
TAX SPECIFIED IN THIS SECTION,
EXCEPT WHEN SUCH BY-PRODUCTS ARE
TRANSFERRED TO ANY OF THE LOCAL
OIL REFINERIES THROUGH SALE,
BARTER OR EXCHANGE, FOR THE
PURPOSE OF FURTHER PROCESSING OR
BLENDING INTO FINISHED PRODUCTS

Page 78 of 139
WHICH ARE SUBJECT TO EXCISE TAX
UNDER THIS SECTION.

FOR THE PERIOD COVERING 2018 TO


2020, THE SCHEDULED INCREASE IN
THE EXCISE TAX ON FUEL AS IMPOSED
IN THIS SECTION SHALL BE
SUSPENDED WHEN THE AVERAGE
DUBAI CRUDE OIL PRICE BASED ON
MEAN OF PLATTS SINGAPORE (MOPS)
FOR THREE (3) MONTHS PRIOR TO THE
SCHEDULED INCREASE OF THE MONTH
REACHES OR EXCEEDS EIGHTY
DOLLARS (USD 80) PER BARREL.

PROVIDED, THAT THE DEPARTMENT OF


FINANCE SHALL PERFORM AN ANNUAL
REVIEW OF THE IMPLEMENTATION OF
THE EXCISE TAX ON FUEL AND SHALL,
BE BASED ON PROJECTIONS PROVIDED
AND RECOMMENDATIONS OF THE
DBCC, AS RECONCILED FROM THE
CONDITIONS AS PROVIDED ABOVE,
RECOMMEND THE IMPLEMENTATION OR
SUSPENSION OF THE EXCISE TAX ON
FUEL: PROVIDED, FURTHER, THAT THE
RECOMMENDATION SHALL BE GIVEN
ON A YEARLY BASIS: PROVIDED,
FINALLY, THAT ANY SUSPENSION OF
THE INCREASE IN EXCISE TAX SHALL
NOT RESULT IN ANY REDUCTION OF
THE EXCISE TAX BEING IMPOSED AT
THE TIME OF THE SUSPENSION.

Page 79 of 139
4. Marking of SEC. 148. Manufactured Oils and Other SECTION 148-A. MANDATORY MARKING Inserts a new provision which mandates
petroleum Fuels. – There shall be collected on refined OF ALL PETROLEUM PRODUCTS. – IN the use of fuel markings or similar
products and manufactured mineral oils and motor ACCORDANCE WITH RULES AND technology on petroleum products that are
[Section fuels, the following excise taxes which shall REGULATIONS TO BE ISSUED BY THE refined, manufactured or imported into the
148-A] attach to the goods hereunder enumerated SECRETARY OF FINANCE IN Philippines that are subject to payment of
as soon as they are in existence as such: CONSULTATION WITH THE taxes and duties.
COMMISSIONER OF INTERNAL
xxx REVENUE AND COMMISSIONER OF
CUSTOMS AND IN COORDINATION
WITH THE SECRETARY OF ENERGY, THE
SECRETARY OF FINANCE SHALL
REQUIRE THE USE OF AN OFFICIAL
FUEL MARKING OR SIMILAR
TECHNOLOGY ON PETROLEUM
PRODUCTS THAT ARE REFINED,
MANUFACTURED, OR IMPORTED INTO
THE PHILIPPINES, AND THAT ARE
SUBJECT TO THE PAYMENT OF TAXES
AND DUTIES, SUCH AS BUT NOT
LIMITED TO UNLEADED PREMIUM
GASOLINE, KEROSENE, AND DIESEL
FUEL OIL AFTER THE TAXES AND
DUTIES THEREON HAVE BEEN PAID.
THE MANDATORY MARKING OF ALL
PETROLEUM PRODUCTS SHALL BE IN
ACCORDANCE WITH THE FOLLOWING:

(A) OFFICIAL MARKERS - THERE SHALL


BE A LIST OF CHEMICAL ADDITIVES
AND CORRESPONDING QUANTITATIVE
RATIO AS IDENTIFIED BY THE
SECRETARY OF THE DEPARTMENT OF
FINANCE AS OFFICIAL FUEL MARKERS.
THE OFFICIAL FUEL MARKERS SHALL BE
DISTINCT AND, TO THE GREATEST
DEGREE POSSIBLE, IMPOSSIBLE TO
IMITATE OR REPLICATE; PROVIDED,
THAT THE OFFICIAL FUEL MARKER
Page 80 of 139
MUST BE UNIQUE TO THE PHILIPPINES
AND THAT ITS CHEMICAL
COMPOSITION AND QUANTITATIVE
RATIO MUST PERSIST FOR AT LEAST
THREE (3) YEARS FROM THEIR
APPLICATION OR ADMINISTRATION TO
THE UNMARKED FUEL;

(B) THE PERSON, ENTITY, OR


TAXPAYER WHO OWNS OR ENTERS THE
PETROLEUM PRODUCTS INTO THE
COUNTRY, OR THE PERSON TO WHOM
THE PETROLEUM PRODUCTS ARE
CONSIGNED SHALL CAUSE AND
ACCOMMODATE THE MARKING OF THE
PETROLEUM PRODUCTS WITH THE
OFFICIAL MARKING AGENT;

(C) INTERNAL REVENUE OR CUSTOMS


OFFICERS SHALL BE ON SITE TO
ADMINISTER THE DECLARATION OF
THE TAX AND DUTIES IMPOSED ON THE
PETROLEUM PRODUCTS AND TO
OVERSEE THE APPLICATION OF THE
FUEL MARKING;

(D) ABSENCE OF OFFICIAL OR


DILUTION OF THE OFFICIAL MARKER;
PRESUMPTIONS. IN THE EVENT THAT
THE PETROLEUM PRODUCTS WHICH DO
NOT CONTAIN THE OFFICIAL MARKER
OR WHICH CONTAIN THE OFFICIAL
MARKER BUT IS DILUTED BEYOND THE
ACCEPTABLE PERCENTAGE APPROVED
BY THE SECRETARY OF FINANCE ARE
FOUND IN THE DOMESTIC MARKET OR
IN THE POSSESSION OF ANYONE, OR
UNDER ANY SITUATION WHERE SAID
Page 81 of 139
PETROLEUM PRODUCTS ARE SUBJECT
TO DUTIES AND TAXES, IT SHALL BE
PRESUMED THAT THE SAME WERE
WITHDRAWN WITH THE INTENTION TO
EVADE THE PAYMENT OF THE TAXES
AND DUTIES DUE THEREON;

(E) THE USE OF FRAUDULENT MARKER


ON THE PETROLEUM PRODUCTS SHALL
BE CONSIDERED PRIMA FACIE
EVIDENCE THAT THE SAME HAVE BEEN
WITHDRAWN OR IMPORTED WITHOUT
THE PAYMENT OF TAXES AND DUTIES
DUE THEREON;

(F) ENGAGEMENT OF FUEL MARKING


PROVIDER. THE GOVERNMENT SHALL
ENGAGE ONLY ONE FUEL MARKING
PROVIDER WHO SHALL, UNDER THE
SUPERVISION AND DIRECTION OF THE
COMMISSIONERS OF INTERNAL
REVENUE AND CUSTOMS, BE
RESPONSIBLE FOR PROVIDING,
MONITORING, AND ADMINISTERING
THE FUEL MARKERS, PROVIDE
EQUIPMENT AND DEVICES, CONDUCT
FIELD AND CONFIRMATORY TESTS, AND
PERFORM SUCH OTHER ACTS
INCIDENTAL OR NECESSARY TO THE
PROPER IMPLEMENTATION OF THE
PROVISIONS OF THIS ACT: PROVIDED,
THAT THE FUEL MARKING PROVIDER
SHALL PROVIDE AN END-TO-END
SOLUTION TO THE GOVERNMENT,
INCLUDING THE ESTABLISHMENT AND
OPERATION OF TESTING FACILITIES
THAT ARE CERTIFIED TO ISO 17025.

Page 82 of 139
(G) ALL COSTS PERTAINING TO THE
PROCUREMENT OF THE OFFICIAL FUEL
MARKERS SHALL BE BORNE BY THE
REFINER, MANUFACTURER OR
IMPORTER, OF PETROLEUM PRODUCTS,
AS THE CASE MAY BE; PROVIDED, THAT
THE GOVERNMENT MAY SUBSIDIZE THE
COST OF OFFICIAL FUEL MARKERS IN
THE FIRST YEAR OF IMPLEMENTATION;
AND

(H) FUEL MARKING PROGRAM FUNDS.


IN ADDITION TO ANY APPROPRIATION
TO IMPLEMENT THIS SECTION AND THE
LAST PARAGRAPH OF SECTION 171 OF
THIS ACT, FEES OR CHARGES
COLLECTED IN RELATION TO THE FUEL
MARKING PROGRAM MAY BE RECORDED
AS TRUST RECEIPTS OF THE
IMPLEMENTING AGENCIES, AND SHALL
BE EXCLUSIVELY DISBURSED TO
DEFRAY THE COST OF SERVICES OR
EQUIPMENT REQUIRED TO FULLY
IMPLEMENT THE SAID PROGRAM,
SUBJECT TO RULES AND REGULATIONS
TO BE ISSUED BY THE DOF-DBM-COA
PERMANENT COMMITTEE.

(I) THE MARKING OF PETROLEUM


PRODUCTS SHALL BE MANDATORY
WITHIN FIVE (5) YEARS FROM THE
EFFECTIVITY OF THIS ACT.

(J) THE TERM ‘RANDOM FIELD TEST’


SHALL REFER TO PERIODIC RANDOM
INSPECTIONS AND TESTS PERFORMED
TO ESTABLISH QUALITATIVE AND
QUANTITATIVE POSITIVE RESULT OF
Page 83 of 139
FUEL TRAFFICKING, WHICH ARE
CONDUCTED ON FUELS FOUND IN THE
WAREHOUSES, STORAGE TANKS, GAS
STATIONS AND OTHER RETAIL
OUTLETS, AND IN SUCH OTHER
PROPERTIES OR EQUIPMENT,
INCLUDING MECHANISMS OF
TRANSPORTATION, OF PERSONS
ENGAGED IN THE SALE, DELIVERY,
TRADING, TRANSPORTATION,
DISTRIBUTION, OR IMPORTATION OF
FUEL INTENDED FOR DOMESTIC
MARKET.

THE TERM ‘CONFIRMATORY TESTS’


SHALL REFER TO THE ACCURATE AND
PRECISE ANALYTICAL TEST OF THE
TESTED UNMARKED, ADULTERATED, OR
DILUTED FUEL USING A DEVICE, TOOL
OR EQUIPMENT WHICH WILL VALIDATE
AND CONFIRM THE RESULT OF THE
FIELD TEST, THAT IS IMMEDIATELY
CONDUCTED IN AN ACCREDITED
TESTING FACILITY THAT IS CERTIFIED
TO ISO 17025.
5. Excise tax SEC. 149. Automobiles. – There shall be SEC. 149. Automobiles. – There shall be
on levied, assessed and collected an ad levied, assessed and collected an ad
automobiles valorem tax on automobiles based on the valorem tax on automobiles based on the
[Section manufacturer’s or importer’s selling price, manufacturer’s or importer’s selling price,
149] net of excise and value-added tax, in net of excise and value-added tax, in
accordance with the following schedule: accordance with the following schedule:

Page 84 of 139
EFFECTIVE JANUARY 1, 2018 1. Effective 01 January 2018, the following
shall be the excise tax rates for
NET MANUFACTURER’S PRICE/ RATE automobiles:

Net manufacturer’s Rate [Net manufacturer’s Rate Net 2018


price/ price/ Manufacturing
importer’s selling importer’s selling price/Importer’s
price price Selling Price
Up to P600,000 4%
Up to P600 2% Up to P600 Thousand 2% Over P600,000 10%
Thousand to P1.0 Million
Over P600 Thousand P12,000 + 20% Over P600 Thousand P12,000 + 20%
Over P1.0 20%
to P1.1 Million of value in excess to P1.1 Million of value in excess
Million to P4.0
of P600 Thousand of P600 Thousand
Million
Over P4.0 50%
Over P1.1 Million to P112,000 + 40% Over P1.1 Million to P112,000 + 40%
Million
P2.1 Million of value in excess P2.1 Million of value in excess
of P1.1 Million of P1.1 Million

Over P2.1 Million P512,000 + 60% Over P2.1 Million P512,000 + 60%
of value in excess of value in excess
of P2.1 Million of P2.1 Million]

IMPORTER’S SELLING PRICE

UP TO SIX HUNDRED THOUSAND PESOS


(P600,000) - FOUR PERCENT (4%)

OVER SIX HUNDRED THOUSAND PESOS


(P600,000) TO ONE MILLION PESOS
(P1,000,000) - TEN PERCENT (10%)

OVER ONE MILLION PESOS


(P1,000,000) TO FOUR MILLION PESOS
(P4,000,000) - TWENTY PERCENT
(20%)

Page 85 of 139
OVER FOUR MILLION PESOS
(P4,000,000) - FIFTY PERCENT (50%)

PROVIDED, THAT, HYBRID VEHICLES 2. Subject hybrid vehicles to 50% of


SHALL BE SUBJECT TO FIFTY PERCENT applicable excise tax rates on automobiles.
(50%) OF THE APPLICABLE EXCISE TAX
RATES ON AUTOMOBILES UNDER THIS 3. Exempts purely electric vehicles and
SECTION. PROVIDED, FURTHER, pick-ups from excise tax on automobiles.
Provided, That the brackets reflecting the PURELY ELECTRIC VEHICLES AND PICK-
manufacturer’s price or importer’s selling UPS SHALL BE EXEMPT FROM EXCISE
price, net of excise and value-added taxes, TAX ON AUTOMOBILES. [Provided, That
will be indexed by the Secretary of Finance the brackets reflecting the manufacturer’s
once every two (2) years if the change in the price or importer’s selling price, net of
exchange rate of the Philippine peso against excise and value-added taxes, will be
the United States (U.S.) dollar is more than indexed by the Secretary of Finance once
ten percent (10%) from the date of every two (2) years if the change in the
effectivity of this Act, in the case of initial exchange rate of the Philippine peso against
adjustment and from the last revision date in the United States (U.S.) dollar is more than
the case of subsequent adjustments. ten percent (10%) from the date of
effectivity of this Act, in the case of initial
adjustment and from the last revision date
in the case of subsequent adjustments.

The manufacturer’s price or importer’s The manufacturer’s price or importer’s


selling price, net of excise and value-added selling price, net of excise and value-added
taxes, shall be indexed by the full rate of the taxes, shall be indexed by the full rate of
peso depreciation or appreciation, as the the peso depreciation or appreciation, as the
case may be. case may be.

Provided, That the brackets reflecting the [Provided, That the brackets reflecting the 4. Removes the requirement to index the
manufacturer's price or importer's selling manufacturer's price or importer's selling manufacturer’s price or importer’s selling
price, net of excise and value added-taxes, price, net of excise and value added-taxes, price considering the exchange rate of
will be indexed by the Secretary of Finance will be indexed by the Secretary of Finance Philippines peso to US dollars for purposes
once every two years if the change in the once every two years if the change in the of excise tax on automobiles.
exchange rate of the Philippine peso against exchange rate of the Philippine peso against
the United States (U.S) dollar is more ten the United States (U.S) dollar is more ten
percent (10%) from the date of effectivity of percent (10%) from the date of effectivity of
this Act, in the case of initial adjustments this Act, in the case of initial adjustments and
Page 86 of 139
and from the last revision date in the case of from the last revision date in the case of
subsequent adjustments. subsequent adjustments.

The manufacturer's price or importer's The manufacturer's price or importer's selling


selling price, net of excise and value added price, net of excise and value added taxes,
taxes, shall be indexed by the full rate of the shall be indexed by the full rate of the peso
peso depreciation or appreciation, as the depreciation or appreciation, as the case may
case may be. be.

Provided, further, That in case the change in Provided, further, That in case the change in
the exchange rate of the Philippine peso the exchange rate of the Philippine peso
against the U.S dollar is at least twenty against the U.S dollar is at least twenty
percent (20%) at any time within the two (2) percent (20%) at any time within the two (2)
year period referred to above, the Secretary year period referred to above, the Secretary
of Finance shall index the brackets reflecting of Finance shall index the brackets reflecting
the manufacturer's price or importer's selling the manufacturer's price or importer's selling
price, net of excise and value added-taxes, price, net of excise and value added-taxes,
by the full rate of the peso depreciation or by the full rate of the peso depreciation or
appreciation, as the case may be. appreciation, as the case may be.]

As used in this Section- As used in this Section-

(a) Automobile shall mean any four (4) or (a) Automobile shall mean any four (4) or
more wheeled motor vehicle regardless of more wheeled motor vehicle regardless of
seating capacity, which is propelled by seating capacity, which is propelled by
gasoline, diesel, electricity or any other gasoline, diesel, electricity or any other
motive power. Provided, That for purposes of motive power. Provided, That for purposes of
this Act, buses, trucks, cargo vans, this Act, buses, trucks, cargo vans,
jeeps/jeepneys/ shall not be considered as [jeeps/]jeepneys/ shall not be considered as
automobiles. automobiles.

(b) Trucks/cargo van shall mean a motor (b) Trucks/cargo van shall mean a motor 5. Classifies pick-ups as trucks/cargo van
vehicle of any configuration that is vehicle of any configuration that is for excise tax purposes.
exclusively designed for the carriage of exclusively designed for the carriage of goods
goods and with any number of wheels and and with any number of wheels and axles:
axles: provided, that pick-ups shall not be provided, that pick-ups shall [not] be
considered as trucks. considered as trucks.

Page 87 of 139
(c) Jeep/jeepney/jeepney substitutes shall (c) J[eep/j]eepney/jeepney substitutes shall
mean as "Philippine jeep or jeepney" which mean as "Philippine jeep or jeepney" which
are of the jitney type locally designed and are of the jitney type locally designed and
manufactured generally from surplus parts manufactured generally from surplus parts
and components. It shall also include and components. It shall also include jeepney
jeepney substitutes that are manufactured substitutes that are manufactured from
from brand-new single cab chassis or cowl brand-new single cab chassis or cowl chassis
chassis and locally customized rear body that and locally customized rear body that has
has continuous sideway row seats with open continuous sideway row seats with open rear
rear door and without retractable glass door and without retractable glass windows.
windows.

(d) Bus shall mean a motor vehicle of any (d) Bus shall mean a motor vehicle of any
configuration with gross vehicle weight of 4.0 configuration with gross vehicle weight of 4.0
tons or more with any number of wheels and tons or more with any number of wheels and
axles, which is generally accepted and axles, which is generally accepted and
specifically designed for mass or public specifically designed for mass or public
transportation. transportation.

(e) Single cab chassis shall mean a motor (e) Single cab chassis shall mean a motor
vehicle with complete engine power train and vehicle with complete engine power train and
chassis equipped with a cab that has a chassis equipped with a cab that has a
maximum of two (2) doors and only one (1) maximum of two (2) doors and only one (1)
row of seats. row of seats.

(f) Special purpose vehicle shall mean a (f) Special purpose vehicle shall mean a
motor vehicle designed for specific motor vehicle designed for specific
applications such as cement mixer, fine applications such as cement mixer, fine
truck, boom truck, ambulance and/or truck, boom truck, ambulance and/or medical
medical unit, and off-road vehicles for heavy unit, and off-road vehicles for heavy
industries and not for recreational activities. industries and not for recreational activities.

(G) HYBRID ELECTRIC VEHICLE SHALL 6. Provides definition of the term “hybrid
MEAN A MOTOR VEHICLE POWERED BY electric vehicles” for purposes of excise tax
ELECTRIC ENERGY, WITH OR WITHOUT on automobiles.
PROVISION FOR OFF-VEHICLE
CHARGING, IN COMBINATION WITH
GASOLINE, DIESEL OR ANY OTHER
Page 88 of 139
MOTIVE POWER: PROVIDED, THAT, FOR
PURPOSES OF THIS ACT, A HYBRID
ELECTRIC VEHICLE MUST BE ABLE TO
PROPEL ITSELF FROM A STATIONARY
CONDITION USING SOLELY ELECTRIC
MOTOR.

Provided, That in the case of imported Provided, That in the case of imported
automobiles not for sale, the tax imposed automobiles not for sale, the tax imposed
herein shall be based on the total landed herein shall be based on the total landed
value, including transaction value, customs value, including transaction value, customs
duty and all other charges. duty and all other charges.

Automobiles used exclusively within the Automobiles used exclusively within the
Freeport zone shall be exempt from excise Freeport zone shall be exempt from excise
tax. tax.
7. Excise tax SEC. 150. Non-essential Goods. - SEC. 150-A. NON-ESSENTIAL Imposes a 5% excise tax based on the
on non- SERVICES. - THERE SHALL BE LEVIED, gross sales/receipts derived from the
essentials xxx ASSESSED AND COLLECTED A TAX performance of cosmetic procedures,
(cosmetic EQUIVALENT TO FIVE PERCENT (5%) surgeries and body enhancements
procedures) BASED ON THE GROSS RECEIPTS undertaken for aesthetic reasons (excluding
[Section DERIVED FROM THE PERFORMANCE OF procedures to ameliorate deformities arising
150(A)] SERVICES, NET OF EXCISE TAX AND from or directly related to congenital or
VALUE-ADDED TAX, ON INVASIVE developmental defect or abnormality,
COSMETIC PROCEDURES, SURGERIES, personal injury from accident or trauma or
AND BODY ENHANCEMENTS DIRECTED disfiguring disease, tumor, virus or
SOLELY TOWARDS IMPROVING, infection) except cases or treatments
ALTERING, OR ENHANCING THE covered by the National Health Insurance
PATIENT’S APPEARANCE AND DO NOT Program.
MEANINGFULLY PROMOTE THE PROPER
FUNCTION OF THE BODY OR PREVENT
OR TREAT ILLNESS OR DISEASE:
PROVIDED, THAT THIS TAX SHALL NOT
APPLY TO PROCEDURES NECESSARY
TO AMELIORATE A DEFORMITY
ARISING FROM, OR DIRECTLY RELATED
TO, A CONGENITAL OR
DEVELOPMENTAL DEFECT OR
Page 89 of 139
ABNORMALITY, A PERSONAL INJURY
RESULTING FROM AN ACCIDENT OR
TRAUMA, OR DISFIGURING DISEASE,
TUMOR, VIRUS OR INFECTION:
PROVIDED, FINALLY, THAT CASES OR
TREATMENTS COVERED BY THE
NATIONAL HEALTH INSURANCE
PROGRAM SHALL NOT BE SUBJECT TO
THIS TAX.
8. Excise tax SEC. 150-B. SWEETENED BEVERAGES. –
on
sweetened (A) RATE AND BASE OF TAX. – 1. Imposes the following rates on excise
beverages EFFECTIVE JANUARY 1, 2018 tax on sweetened beverages:
[Section
150(B)] (1) A TAX OF SIX PESOS (P6.00) PER
LITER OF VOLUME CAPACITY SHALL BE Type of Sweetened Tax
LEVIED, ASSESSED, AND COLLECTED Beverage
ON SWEETENED BEVERAGES USING Sweetened beverages P6.0 per liter
PURELY CALORIC SWEETENERS, AND using purely caloric and of volume
PURELY NON-CALORIC SWEETENERS, non-caloric sweeteners capacity
OR A MIX OF CALORIC AND NON- or mix of caloric and
CALORIC SWEETENERS: PROVIDED, non-caloric sweeteners
THAT THIS TAX RATE SHALL NOT Sweetened beverages Exempt
APPLY TO SWEETENED BEVERAGES using purely coconut
USING HIGH FRUCTOSE CORN SYRUP. sap sugar and purely
PROVIDED FURTHER, THAT steviol glycosides
SWEETENED BEVERAGES USING Sweetened beverages P12.0
PURELY COCONUT SAP SUGAR AND using purely high
PURELY STEVIOL GLYCOSIDES SHALL fructose corn syrup or
BE EXEMPT FROM THIS TAX; AND in combination with any
caloric or non-caloric
(2) A TAX OF TWELVE PESOS (P12.00) sweetener
PER LITER OF VOLUME CAPACITY
SHALL BE LEVIED, ASSESSED, AND
COLLECTED ON SWEETENED
BEVERAGES USING PURELY HIGH
FRUCTOSE CORN SYRUP OR IN

Page 90 of 139
COMBINATION WITH ANY CALORIC OR
NON-CALORIC SWEETENER.

(B) DEFINITION OF TERMS. – AS USED


IN THIS ACT:

(1) SWEETENED BEVERAGES (SBS)


REFER TO NON-ALCOHOLIC BEVERAGES
OF ANY CONSTITUTION (LIQUID,
POWDER, OR CONCENTRATES) THAT
ARE PRE-PACKAGED AND SEALED IN
ACCORDANCE WITH THE FOOD AND
DRUG ADMINISTRATION (FDA)
STANDARDS, THAT CONTAIN CALORIC
AND/OR NON-CALORIC SWEETENERS
ADDED BY THE MANUFACTURERS, AND
SHALL INCLUDE, BUT NOT BE LIMITED
TO THE FOLLOWING, AS DESCRIBED IN
THE FOOD CATEGORY SYSTEM FROM
CODEX ALIMENTARIUS FOOD
CATEGORY DESCRIPTORS (CODEX
STAN 192-1995, REV 2017 OR THE
LATEST) AS ADOPTED BY THE FDA:

(A). SWEETENED JUICE DRINKS;

(B). SWEETENED TEA;

(C). ALL CARBONATED BEVERAGES;

(D). FLAVORED WATER;

(E). ENERGY AND SPORTS DRINKS;

(F). OTHER POWDERED DRINKS NOT


CLASSIFIED AS MILK, JUICE, TEA, AND
COFFEE;

Page 91 of 139
(G). CEREAL AND GRAIN BEVERAGES;
AND

(H). OTHER NON-ALCOHOLIC


BEVERAGES THAT CONTAIN ADDED
SUGAR.

(2) CALORIC SWEETENER REFERS TO A


SUBSTANCE THAT IS SWEET AND
INCLUDES SUCROSE, FRUCTOSE, AND
GLUCOSE THAT PRODUCES A CERTAIN
SWEETNESS;

(3) HIGH FRUCTOSE CORN SYRUP


REFERS TO A SWEET SACCHARIDE
MIXTURE CONTAINING FRUCTOSE AND
GLUCOSE WHICH IS DERIVED FROM
CORN AND ADDED TO PROVIDE
SWEETNESS TO BEVERAGES, AND
WHICH INCLUDES OTHER SIMILAR
FRUCTOSE SYRUP PREPARATIONS;

(4) NON-CALORIC SWEETENER REFERS


TO A SUBSTANCE THAT ARE
ARTIFICIALLY OR CHEMICALLY
PROCESSED THAT PRODUCES A
CERTAIN SWEETNESS. THESE ARE
SUBSTANCES WHICH CAN BE DIRECTLY
ADDED TO BEVERAGES, SUCH AS
ASPARTAME, SUCRALOSE, SACCHARIN,
ACESULFAME POTASSIUM, NEOTAME,
CYCLAMATES AND OTHER NON-
NUTRITIVE SWEETENERS APPROVED
BY THE CODEX ALIMENTARIUS AND
ADOPTED BY THE FDA.
2. Exempts plain milk, infant formula,
(C) EXCLUSIONS. – THE FOLLOWING growing up milk, powdered milk and
PRODUCTS, AS DESCRIBED IN THE flavored milk, ready to drink milk,
Page 92 of 139
FOOD CATEGORY SYSTEM FROM CODEX fermented milk, soymilk, flavored soymilk,
ALIMENTARIUS FOOD CATEGORY 100% natural fruit juices, 100% natural
DESCRIPTORS (CODEX STAN 192-1995, vegetable juices, meal replacement and
REV 2017 OR THE LATEST) AS medically indicated beverages, ground
ADOPTED BY THE FDA, ARE EXCLUDED coffee, instant soluble coffee, and pre-
FROM THE SCOPE OF THIS ACT: packaged powdered coffee products from
the excise tax.
(1) ALL MILK PRODUCTS, INCLUDING
PLAIN MILK, INFANT FORMULA MILK,
FOLLOW-ON MILK, GROWING UP MILK,
POWDERED MILK, READY-TO-DRINK
MILK AND FLAVORED MILK,
FERMENTED MILK, SOYMILK, AND
FLAVORED SOYMILK;

(2) ONE HUNDRED PERCENT (100%)


NATURAL FRUIT JUICES – ORIGINAL
LIQUID RESULTING FROM THE
PRESSING OF FRUIT, THE LIQUID
RESULTING FROM THE
RECONSTITUTION OF NATURAL FRUIT
JUICE CONCENTRATE, OR THE LIQUID
RESULTING FROM THE RESTORATION
OF WATER TO DEHYDRATED NATURAL
FRUIT JUICE THAT DO NOT HAVE
ADDED SUGAR OR CALORIC
SWEETENER;

(3) ONE HUNDRED PERCENT (100%)


NATURAL VEGETABLE JUICES –
ORIGINAL LIQUID RESULTING FROM
THE PRESSING OF VEGETABLES, THE
LIQUID RESULTING FROM THE
RECONSTITUTION OF NATURAL
VEGETABLE JUICE CONCENTRATE, OR
THE LIQUID RESULTING FROM THE
RESTORATION OF WATER TO
DEHYDRATED NATURAL VEGETABLE
Page 93 of 139
JUICE THAT DO NOT HAVE ADDED
SUGAR OR CALORIC SWEETENER;

(4) MEAL REPLACEMENT AND


MEDICALLY INDICATED BEVERAGES –
ANY LIQUID OR POWDER
DRINK/PRODUCT FOR ORAL
NUTRITIONAL THERAPY FOR PERSONS
WHO CANNOT ABSORB OR METABOLIZE
DIETARY NUTRIENTS FROM FOOD OR
BEVERAGES, OR AS A SOURCE OF
NECESSARY NUTRITION USED DUE TO
A MEDICAL CONDITION AND AN ORAL
ELECTROLYTE SOLUTION FOR INFANTS
AND CHILDREN FORMULATED TO
PREVENT DEHYDRATION DUE TO
ILLNESS; AND

(6) GROUND COFFEE, INSTANT


SOLUBLE COFFEE, AND PRE-PACKAGED
POWDERED COFFEE PRODUCTS.

(D) FILING OF RETURN AND PAYMENT


OF EXCISE TAX AND PENALTY. –

(1) FILING OF RETURN AND PAYMENT


OF EXCISE TAX ON DOMESTIC AND
IMPORTED SWEETENED BEVERAGES –
THE PROVISION OF SECTIONS 130 AND
131 OF THE NIRC, AS APPROPRIATE,
SHALL APPLY TO SWEETENED
BEVERAGES.

(2) PENALTY – UPON FINAL FINDINGS


BY THE COMMISSIONER OF INTERNAL
REVENUE AND/OR CUSTOMS THAT ANY
MANUFACTURER OR IMPORTER, IN
VIOLATION OF THIS SECTION,
Page 94 of 139
MISDECLARES OR MISREPRESENTS IN
THE SWORN STATEMENT PROVIDED IN
SECTION 130 (C) OF THE NIRC, AS
AMENDED, ANY PERTINENT DATA OR
INFORMATION, THE PENALTY OF
SUMMARY CANCELLATION OR
WITHDRAWAL OF THE PERMIT TO
ENGAGE IN BUSINESS AS
MANUFACTURER OR IMPORTER OF
SWEETENED BEVERAGES AS PROVIDED
UNDER SECTION 268 OF THE NIRC, AS
AMENDED, SHALL BE IMPOSED.

ANY CORPORATION, ASSOCIATION OR


PARTNERSHIP LIABLE FOR ANY OF THE
ACTS OR OMISSIONS IN VIOLATION OF
THIS SECTION SHALL BE FINED TREBLE
THE AMOUNT OF DEFICIENCY TAXES,
SURCHARGES, AND INTEREST WHICH
MAY BE ASSESSED PURSUANT TO THIS
SECTION.

ANY PERSON LIABLE FOR ANY OF THE


ACTS OR OMISSIONS PROHIBITED
UNDER THIS SECTION SHALL BE
CRIMINALLY LIABLE AND PENALIZED
UNDER SECTION 254 OF THE NIRC, AS
AMENDED. ANY PERSON WHO
WILLFULLY AIDS OR ABETS IN THE
COMMISSION OF ANY SUCH ACT OR
OMISSION SHALL BE CRIMINALLY
LIABLE IN THE SAME MANNER AS THE
PRINCIPAL.

IF NOT A CITIZEN OF THE


PHILIPPINES, THE OFFENDER SHALL BE
DEPORTED IMMEDIATELY AFTER
SERVING THE SENTENCE WITHOUT
Page 95 of 139
FURTHER PROCEEDINGS FOR
DEPORTATION.

(E) SPECIFIC RESPONSIBILITY OF THE


FOOD AND DRUG ADMINISTRATION
(FDA). – STARTING JUNE 1, 2018, THE
FDA SHALL REQUIRE ALL
MANUFACTURERS AND IMPORTERS OF
SWEETENED BEVERAGES COVERED BY
THIS ACT TO INDICATE ON THE LABEL
THE TYPE OF SWEETENER USED, AND
ON SWEETENED BEVERAGES IN
POWDER FORM TO INDICATE ON THE
LABEL THE EQUIVALENT OF EACH
SERVING PER LITER OF VOLUME
CAPACITY.

THE FDA SHALL ALSO CONDUCT POST


MARKETING SURVEILLANCE OF THE
SWEETENED BEVERAGES ON DISPLAY
IN SUPERMARKETS, GROCERIES OR
RETAIL STORES AND/OR INSPECTION
OF MANUFACTURING SITES TO
DETERMINE COMPLIANCE WITH THE
REQUIREMENTS OF THIS SECTION.
VIOLATIONS OF THE PROVISIONS OF
THIS ACT, INCLUDING BUT NOT
LIMITED TO MISLABELING OR
MISBRANDING, SHALL, TO THE EXTENT
APPLICABLE, BE PUNISHABLE UNDER
EXISTING LAWS.

(F) DUTY OF THE COMMISSIONER TO


ENSURE PAYMENT OF TAXES. - IT
SHALL BE THE DUTY OF THE
COMMISSIONER, AMONG OTHER
THINGS, TO PRESCRIBE A MATERIALLY
UNIQUE, SECURE AND NON
Page 96 of 139
REMOVABLE IDENTIFICATION, SUCH
AS CODES, STAMPS OR OTHER
MARKINGS TO BE FIRMLY AND
CONSPICUOUSLY AFFIXED ON AND
FORM PART OF THE LABEL OF ALL
EXCISABLE SWEETENED BEVERAGES.

FOR THIS PURPOSE, THE


ABOVEMENTIONED CONTROL MEASURE
SHALL BE CAUSED BY THE
COMMISSIONER TO BE PRINTED WITH
ADEQUATE SECURITY FEATURES TO
ENSURE THE PAYMENT OF EXCISE TAX
ON SWEETENED BEVERAGES.

(G) REVIEW OF IMPLEMENTATION OF


THE SWEETENED BEVERAGE TAX. – AT
THE START OF THE IMPLEMENTATION
OF THE SUGAR SWEETENED BEVERAGE
TAX AND EVERY YEAR THEREAFTER,
THE DEPARTMENT OF HEALTH,
DEPARTMENT OF SCIENCE AND
TECHNOLOGY AND DEPARTMENT OF
FINANCE SHALL REVIEW THE IMPACT
OF THESE PROVISIONS ON ITS HEALTH
OBJECTIVES WITH THE VIEW TO
MAKING RECOMMENDATIONS ON THE
TAX RATE ON THESE BEVERAGES.
9.Excise tax SEC. 151. Mineral Products. – SEC. 151. Mineral Products. – Increases the excise tax on mineral
on mineral products, as follows:
products (A) Rates of Tax. – There shall be (A) Rates of Tax. - There shall be levied,
[Section levied, assessed and collected on minerals, assessed and collected on minerals, mineral
151] mineral products and quarry resources, products and quarry resources, excise tax
excise tax as follows: as follows:

(1) On coal and coke, a tax of Ten pesos (1) On DOMESTIC OR IMPORTED coal
(P10.00) per metric ton; and coke, NOTWITHSTANDING ANY

Page 97 of 139
INCENTIVES GRANTED IN ANY LAW OR
SPECIAL LAW:

EFFECTIVE JANUARY 1, 2018; FIFTY Mineral New Tax Rate/s


PESOS (P50.00) PER METRIC TON. Product/
Current Rate
EFFECTIVE JANUARY 1, 2019: ONE Coal and P50 per metric ton
HUNDRED PESOS (P100.00) PER Coke – effective 01 January
METRIC TON P10.00 2018; P100 effective 01
January 2019; and P150
EFFECTIVE JANUARY 1, 2020: ONE effective 01 January
HUNDRED FIFTY PESOS (P150.00) PER 2020.
METRIC TON [, a tax of Ten pesos Nonmetallic 4% based on actual
(P10.00) per metric ton]; minerals and market value of gross
quarry output at the time of
(2) On all nonmetallic minerals and (2) On all nonmetallic minerals and quarry resources removal for locally
quarry resources, a tax of two percent (2%) resources, a tax of [two percent (2%)] (copper and extracted or produced,
based on the actual market value of the FOUR PERCENT (4%) based on the actual other metallic or the value used in
gross output thereof at the time of removal, market value of the gross output thereof at products and determining tariff and
in the case of those locally extracted or the time of removal, in the case of those gold and customs duties (net of
produced; or the value used by the Bureau locally extracted or produced; or the value chromite) – excise tax and VAT) in
of Customs in determining tariff and used by the Bureau of Customs in 2% case of importation.
customs duties, net of excise tax and value- determining tariff and customs duties, net Indigenous 6% of the fair
added tax, in the case of importation. of excise tax and value-added tax in the petroleum – international market
case of importation. 3.0% price

xxx xxx

(a) Copper and other metallic minerals; (a) Copper and other metallic minerals,
FOUR PERCENT (4%)[;].
(i) On the first three (3) years upon the
effectivity of Republic Act No. 7729, one [(i) On the first three (3) years upon the
percent (1%); effectivity of Republic Act No. 7729, one
percent (1%);

(ii) On the fourth and the fifth years, one (ii) On the fourth and the fifth years, one
and a half percent (1 ½%); and and a half percent (1 1/2%); and

Page 98 of 139
(iii) On the sixth year and thereafter, two (iii) On the sixth year and thereafter, two
percent (2%); percent (2%);]

(b) Gold and chromite, two percent (2%). (b) Gold and chromite, [two percent (2%)]
FOUR PERCENT (4%)

(4) On indigenous petroleum, a tax of (4) On indigenous petroleum, a tax of


three percent (3%) of the fair international [three percent (3%)] SIX PERCENT (6%)
market price thereof, on the first taxable of the fair international market price
sale, barter, exchange or such similar thereof, on the first taxable sale, barter,
transaction, such tax to be paid by the exchange or such similar transaction, such
buyer or purchaser before removal from the tax to be paid by the buyer or purchaser
place of production. before removal from the place of
production.
10. Use of SEC. 155. Manufacturers to Provide SEC. 155. Manufacturers AND/OR Mandates the Department of Finance (DOF)
metering Themselves with Counting or Metering IMPORTERS to Provide Themselves with to maintain a registry of all petroleum
devise to Devices to Determine Production. – Counting or Metering Devices to Determine manufacturers and/or importers and the
determine Manufacturers of cigarettes, alcoholic VOLUME OF Production AND articles being manufactured and/or
volume of products, oil products and other articles IMPORTATION. – Manufacturers of imported by them, and create a real-time
production subject to excise tax that can be similarly cigarettes, alcoholic products, oil products, inventory of petroleum articles being
and measured shall provide themselves with and other articles subject to excise tax that manufactured, imported or found in storage
importation such necessary number of suitable counting can be similarly measured shall provide depots of petroleum manufacturers.
[Section or metering devices to determine as themselves with such necessary number of Importers of finished products shall be
155] accurately as possible the volume, quantity suitable counting or metering devices to required to provide BIR-accredited metering
or number of the articles produced by them determine as accurately as possible the devices to determine accurately the volume
under rules and regulations promulgated by volume, quantity or number of the articles of petroleum products imported by them.
the Secretary of Finance, upon produced by them under rules and
recommendation of the Commissioner. regulations promulgated by the Secretary of
Finance, upon recommendation of the
This requirement shall be complied with Commissioner[.]:PROVIDED, THAT THE
before commencement of operations. DEPARTMENT OF FINANCE SHALL
MAINTAIN A REGISTRY OF ALL
PETROLEUM MANUFACTURERS
AND/OR IMPORTERS AND THE
ARTICLES BEING MANUFACTURED
AND/OR IMPORTED BY THEM:
PROVIDED, FURTHER, THAT THE
DEPARTMENT OF FINANCE SHALL
Page 99 of 139
MANDATE THE CREATION OF A REAL-
TIME INVENTORY OF PETROLEUM
ARTICLES BEING MANUFACTURED,
IMPORTED OR FOUND IN STORAGE
DEPOTS OF SUCH PETROLEUM
MANUFACTURERS AND/OR
IMPORTERS: PROVIDED, FINALLY,
THAT IMPORTERS OF FINISHED
PETROLEUM PRODUCTS SHALL ALSO
PROVIDE THEMSELVES WITH BUREAU-
ACCREDITED METERING DEVICES TO
DETERMINE AS ACCURATELY AS
POSSIBLE THE VOLUME OF PETROLEUM
PRODUCTS IMPORTED BY THEM.
11. Authority SEC. 171. Authority of Internal Revenue SEC. 171. Authority of Internal Revenue Provides authority to the BIR to conduct
to search for Officer in Searching for Taxable Articles. – Officer in Searching for AND TESTING periodic random field tests and
taxable Any internal revenue officer may, in the Taxable Articles. – Any internal revenue confirmatory tests on fuel required to be
articles discharge of his official duties, enter any officer may, in the discharge of his official marked found in warehouses, storage
[Section house, building or place where articles duties, enter any house, building or place tanks, gas stations retail outlets, and in
171] subject to tax under this Title are produced where articles subject to tax under this Title other properties of persons engaged in sale,
or kept, or are believed by him upon are produced or kept, or are believed by delivery or trading, transportation of fuel
reasonable grounds to be produced or kept, him upon reasonable grounds to be intended for the domestic market.
so far as may be necessary to examine, produced or kept, so far as may be
discover or seize the same. necessary to examine, TEST, discover or
seize the same.

He may also stop and search any vehicle or He may also stop and search any vehicle or
other means of transportation when upon other means of transportation when upon
reasonable grounds he believes that the reasonable grounds he believes that the
same carries any article on which the excise same carries any article on which the excise
tax has not been paid. tax has not been paid.

SUBJECT TO RULES AND REGULATIONS


TO BE ISSUED BY THE SECRETARY OF
FINANCE, THE COMMISSIONER OF
INTERNAL REVENUE OR HIS
AUTHORIZED REPRESENTATIVES MAY
CONDUCT PERIODIC RANDOM FIELD
Page 100 of 139
TESTS AND CONFIRMATORY TESTS ON
FUEL REQUIRED TO BE MARKED UNDER
SECTION 148-A FOUND IN
WAREHOUSES, STORAGE TANKS, GAS
STATIONS AND OTHER RETAIL
OUTLETS, AND IN SUCH OTHER
PROPERTIES OF PERSONS ENGAGED IN
THE SALE, DELIVERY, TRADING,
TRANSPORTATION, DISTRIBUTION, OR
IMPORTATION OF FUEL INTENDED FOR
THE DOMESTIC MARKET: PROVIDED,
THE FOLLOWING SHALL BE COMPLIED
WITH:

(A) RANDOM FIELD TESTING SHALL BE


CONDUCTED IN THE PRESENCE OF
REVENUE OR CUSTOMS OFFICERS, FUEL
MARKING PROVIDER, AND THE
AUTHORIZED REPRESENTATIVE OF THE
OWNER OF THE FUEL TO BE TESTED:
PROVIDED, THAT AN EMPLOYEE
ASSIGNED OR WORKING AT THE PLACE
WHERE THE RANDOM FIELD TEST IS
CONDUCTED SHALL BE DEEMED AN
AUTHORIZED REPRESENTATIVE OF THE
OWNER;

(B) ALL FIELD TESTS SHALL BE


PROPERLY FILMED OR VIDEO-TAPED,
AND DOCUMENTED;

(C) A SAMPLE OF THE RANDOMLY


TESTED FUEL SHALL BE IMMEDIATELY
OBTAINED BY THE REVENUE OR
CUSTOMS OFFICER UPON
DISCOVERING THAT THE SAME IS
UNMARKED, ADULTERATED, OR
DILUTED:
Page 101 of 139
PROVIDED, FURTHER THAT
CONFIRMATORY FUEL TEST
CERTIFICATES ISSUED BY FUEL
TESTING FACILITIES SHALL BE VALID
FOR ANY LEGAL PURPOSE FROM THE
DATE OF ISSUE, AND SHALL
CONSTITUTE ADMISSIBLE AND
CONCLUSIVE EVIDENCE BEFORE ANY
COURT.

Page 102 of 139


VI. Documentary Stamp Tax
Tax Code Present Provision TRAIN Amendment Reform Measure
Provision
1. DST on SEC. 174. Stamp Tax on Original SEC. 174. Stamp Tax on Original Issue of Increases the DST on original issue of shares
original issuance Issue of Shares of Stock. – On every Shares of Stock. – On every original issue, of stock by P1.0 from P1.0 to P2.0 on each
of shares of original issue, whether on whether on organization, reorganization or P200.0 of the par value of the shares of stock.
stock [Section organization, reorganization or for for any lawful purpose, of shares of stock by
174] any lawful purpose, of shares of any association, company, or corporation,
stock by any association, company there shall be collected a documentary
or corporation, there shall be stamp tax of [One peso (P1.00)] TWO
collected a documentary stamp tax PESOS (P2.00) on each Two hundred
of One peso (P1.00) on each Two pesos (P200), or fractional part thereof, of
hundred pesos (P200), or fractional the par value, of such shares of stock:
part thereof, of the par value, of Provided, That in the case of the original
such shares of stock: Provided, That issue of shares of stock without par value,
in the case of the original issue of the amount of the documentary stamp tax
shares of stock without par value, herein prescribed shall be based upon the
the amount of the documentary actual consideration for the issuance of such
stamp tax herein prescribed shall be shares of stock: Provided, further, that in
based upon the actual consideration the case of stock dividends, on the actual
for the issuance of such shares of value represented by each share.”
stock: Provided, further, That in the
case of stock dividends, on the
actual value represented by each
share.
2. DST on sales, SEC. 175. Stamp Tax on Sales, SEC. 175. Stamp Tax on Sales, Agreements Increases the DST on sales, agreements to
agreements to Agreements to Sell, Memoranda of to Sell, Memoranda of Sales, Deliveries or sell, memoranda of sales or agreements or
sell, memoranda Sales, Deliveries or Transfer of Transfer of Shares or Certificates of Stock. – transfer of shares or certificates of stocks
of sales or Shares or Certificates of Stock. – On all sales, or agreements to sell, or from P0.75 to P1.50 on each P200, or
agreements or On all sales, or agreements to sell, memoranda of sales, or deliveries or fractional part thereof, of the par value of
transfer of or memoranda of sales, or transfer of such securities by assignment in such stock. The DST rate applicable in the
shares or deliveries, or transfer of shares or blank, or by delivery, or by any paper or case of stock without par value is also
certificates of certificates of stock in any agreement, or memorandum or other increased from 25% to 50% of the amount of
stocks [Section association, company, or evidences of transfer or sale whether the DST paid upon the original issue of the
175] corporation, or transfer of such entitling the holder in any manner to the stock.
securities by assignment in blank, benefit of such stock, or to secure the future
or by delivery, or by any paper or payment of money, or for the future transfer
agreement, or memorandum or of any stock, there shall be collected a
Page 103 of 139
other evidences of transfer or sale documentary stamp tax of [Seventy-five
whether entitling the holder in any centavos (P0.75)] ONE PESO AND FIFTY
manner to the benefit of such CENTAVOS (P1.50) on each Two hundred
stock, or to secure the future pesos (P200), or fractional part thereof, of
payment of money, or for the the par value of such stock: Provided, That
future transfer of any stock, there only one tax shall be collected on each sale
shall be collected a documentary or transfer of stock from one person to
stamp tax of Seventy-five centavos another, regardless of whether or not a
(P0.75) on each Two hundred pesos certificate of stock or obligation is issued,
(P200), or fractional part thereof, indorsed, or delivered in pursuance of such
of the par value of such stock: sale or transfer: and Provided, further, That
Provided, That only one tax shall be in the case of stock without par value the
collected on each sale or transfer of amount of the documentary stamp tax
stock from one person to another, herein prescribed shall be equivalent to
regardless of whether or not a [twenty-five percent] FIFTY PERCENT of
certificate of stock is issued, the documentary stamp tax paid upon the
indorsed, or delivered in pursuance original issue of said stock.
of such sale or transfer:
and Provided, further, That in the
case of stock without par value the
amount of the documentary stamp
tax herein prescribed shall be
equivalent to twenty-five percent
(25%) of the documentary stamp
tax paid upon the original issue of
said stock.
3. DST on SEC. 177. Stamp Tax on SEC. 177. Stamp Tax on Certificates of Increases the DST on certificates of profits or
certificate of Certificates of Profits or Interest in Profits or Interest in Property or certificate or memorandum showing the
profits or Property or Accumulations. – On all Accumulations. – On all certificates of interest in the property or accumulations from
interest in certificates of profits, or any profits, or any certificate or memorandum P0.50 to P1.00 on each P200 of the face value
property or certificate or memorandum showing showing interest in the property or of the certificates or memorandum.
accumulations interest in the property or accumulations of any association, company
[Section 177] accumulations of any association, or corporation, and on all transfers of such
company or corporation, and on all certificates or memoranda, there shall be
transfers of such certificates or collected a documentary stamp tax of [Fifty
memoranda, there shall be centavos (P0.50)] ONE PESO (P1.00) on
collected a documentary stamp tax each Two hundred pesos, or fractional part
of Fifty centavos (P0.50) on each
Page 104 of 139
Two hundred pesos (P200), or thereof, of the face value of such certificates
fractional part thereof, of the face or memorandum.
value of such certificate or
memorandum.
4. DST on bank SEC. 178. Stamp Tax on Bank SEC. 178. Stamp Tax on Bank Checks, Increases the DST on bank checks, drafts, or
checks, drafts, or Checks, Drafts, Certificates of Drafts, Certificates of Deposit not Bearing certificate of deposits not drawing interest, or
certificate of Deposit not Bearing Interest, and Interest, and Other Instruments. – On each order for the payment of any sum of money
deposits not Other Instruments. – On each bank bank check, draft, or certificate of deposit drawn upon or issued by any bank, trust
drawing interest, check, draft, or certificate of not drawing interest, or order for the company, or any person or persons,
or order for the deposit not drawing interest, or payment of any sum of money drawn upon companies or corporations from P1.50 to P3.0.
payment of any order for the payment of any sum or issued by any bank, trust company, or
sum of money of money drawn upon or issued by any person or persons, companies or
drawn upon or any bank, trust company, or any corporations, at sight or on demand, there
issued by any person or persons, companies or shall be collected a documentary stamp tax
bank, trust corporations, at sight or on of [One peso and fifty centavos (P1.50)]
company, or any demand, there shall be collected a THREE PESOS (P3.00).
person or documentary stamp tax of One
persons, peso and fifty centavos (P1.50).
companies or
corporations
[Section 178]
5. DST on debt SEC. 179. Stamp Tax on All Debt SEC. 179. Stamp Tax on All Debt Increases the DST on debt instruments from
instruments Instruments. – On every original Instruments. – On every original issue of P1.0 to P1.50 on each P200 of the issue price
[Section 179] issue of debt instruments, there debt instruments, there shall be collected a of the debt instrument.
shall be collected a documentary documentary stamp tax of [One peso
stamp tax of One peso (P1.00) on (P1.00)] ONE PESO AND FIFTY
each Two hundred pesos (P200), or CENTAVOS (P1.50) on each Two hundred
fractional part thereof, of the issue pesos (P200.00), or fractional part thereof,
price of any such debt instrument: of the issue price of any such debt
Provided, That for such debt instruments: Provided, that for such debt
instruments with terms of less than instruments with terms of less than one (1)
one (1) year, the documentary year, the documentary stamp tax to be
stamp tax to be collected shall be collected shall be of a proportional amount
of proportional amount in in accordance with the ratio of its term in
accordance with the ratio of its number of days to three hundred sixty-five
term in number of days to three (365) days: Provided, further, That only one
hundred sixty-five (365) days: documentary stamp tax shall be imposed on
Provided, further, That only one
Page 105 of 139
documentary stamp tax shall be either loan agreement, or promissory notes
imposed on either loan agreement, issued to secure such loan.
or promissory notes issued to
secure such loan.
6. DST on bills of SEC. 180. Stamp Tax on All Bills of SEC. 180. Stamp Tax on All Bills of Increases the DST on bills of exchange or
exchange or Exchange or Drafts. – On all bills Exchange or Drafts. – On all bills of drafts from P0.30 to P0.60.
drafts [Section of exchange (between points within exchange (between points within the
180] the Philippines) or drafts, there Philippines) or drafts, there shall be
shall be collected a documentary collected a documentary stamp tax of
stamp tax of Thirty centavos [Thirty centavos (P0.30)] SIXTY
(P0.30) on each Two hundred CENTAVOS (P0.60) on each Two hundred
pesos (P200), or fractional part pesos (P200.00) or fractional part thereof, of
thereof, of the face value of any the face value of any such bill of exchange
such bill of exchange or draft or draft.
7. Stamp Tax SEC. 181. Stamp Tax Upon SEC. 181. Stamp Tax Upon Acceptance of Increases the DST upon acceptance of bills of
Upon Acceptance Acceptance of Bills of Exchange and Bills of Exchange and Others. - Upon any exchange and others from P0.30 to P0.60.
of Bills of Others. - Upon any acceptance or acceptance or payment of any bill of
Exchange and payment of any bill of exchange or exchange or order for the payment of money
Others [Section order for the payment of money purporting to be drawn in a foreign country
181] purporting to be drawn in a foreign but payable in the Philippines, there shall be
country but payable in the collected a documentary stamp tax of
Philippines, there shall be collected [Thirty centavos (P0.30)] SIXTY
a documentary stamp tax of Thirty CENTAVOS (P0.60) on each Two hundred
centavos (P0.30) on each Two pesos (P200), or fractional part thereof, of
hundred pesos (P200), or fractional the face value of any such bill of exchange,
part thereof, of the face value of or order, or the Philippine equivalent to such
any such bill of exchange, or order, value, if expressed in foreign currency.
or the Philippine equivalent to such
value, if expressed in foreign
currency.
8. Stamp Tax on SEC. 182. Stamp Tax on Foreign SEC. 182. Stamp Tax on Foreign Bills of Increases the DST on foreign bills of exchange
Foreign Bills of Bills of Exchange and Letters of Exchange and Letters of Credit. - On all and letters of credit from P0.30 to P0.60.
Exchange and Credit. - On all foreign bills of foreign bills of exchange and letters of
Letters of Credit exchange and letters of credit credit (including orders, by telegraph or
[Section 182] (including orders, by telegraph or
otherwise, for the payment of money
otherwise, for the payment of
issued by express or steamship
money issued by express or
steamship companies or by any companies or by any person or persons)
Page 106 of 139
person or persons) drawn in but drawn in but payable out of the
payable out of the Philippines in a Philippines in a set of three (3) or more
set of three (3) or more according according to the custom of merchants
to the custom of merchants and and bankers, there shall be collected a
bankers, there shall be collected a
documentary stamp tax of [Thirty
documentary stamp tax of Thirty
centavos (P0.30)] SIXTY CENTAVOS
centavos (P0.30) on each Two
hundred pesos (P200), or fractional (P0.60) on each Two hundred pesos
part thereof, of the face value of (P200), or fractional part thereof, of the
any such bill of exchange or letter face value of any such bill of exchange
of credit, or the Philippine or letter of credit, or the Philippine
equivalent of such face value, if equivalent of such face value, if
expressed in foreign currency. expressed in foreign currency.
9. DST on life SEC. 183. Stamp Tax on Life SEC. 183. Stamp Tax on Life Insurance Increases by 100% the DST on life insurance
insurance Insurance Policies. – On all policies Policies. – On all policies of insurance or policies.
policies [Section of insurance or other instruments other instruments by whatever name the
183] by whatever name the same may same may be called, whereby any insurance
be called, whereby any insurance shall be made or renewed upon any life or
shall be made or renewed upon any lives, there shall be collected a one-time
life or lives, there shall be collected documentary stamp tax at the following
a one-time documentary stamp tax rates:
at the following rates:

If the amount of insurance does not If the amount of insurance does not exceed
exceed Php100,000.00 – Exempt P[hp]100,000 -Exempt

If the amount of insurance exceeds If the amount of insurance exceeds


Php100,000.00 but does not P[hp]100,000 but does not exceed
exceed Php300,000.00 - Php 10.00 P[hp]300,000 - [Php 10.00] P20.00

If the amount of insurance exceeds If the amount of insurance exceeds


Php300,000.00 but does not P[hp]300,000 but does not exceed
exceed Php500,000.00 - Php 25.00 P[hp]500,000 - [Php25.00] P50.00

If the amount of insurance exceeds If the amount of insurance exceeds


Php500,000.00 but does not P[hp]150,000 but does not exceed
exceed Php750,000.00 -Php 50.00 P[hp]750,000 - [Php50.00] P100.00

Page 107 of 139


If the amount of insurance exceeds If the amount of insurance exceeds
Php750,000.00 but does not P[hp]750,000 but does not exceed
exceed Php1,000,000.00 - Php P[hp]1,000,000 - [Php 75.00] P150.00
75.00

If the amount of insurance exceeds If the amount of insurance exceeds


Php1,000,000.00 - Php100.00 P[hp]1,000,000 - [Php 100.00] P200.00
10. DST on SEC. 186. Stamp Tax on Policies of SEC. 186. Stamp Tax on Policies of Annuities Increased the DST on policies of annuities
policies of Annuities and Pre-Need Plans. – On and Pre-Need Plans. – On all policies of from P0.50 to P1.0, and from P0.20 to P0.40
annuities and all policies of annuities, or other annuities, or other instruments by whatever for pre-need plans.
pre-need plans instruments by whatever name the name the same may be called, whereby an
[Section 186] same may be called, whereby an annuity may be made, transferred or
annuity may be made, transferred redeemed, there shall be collected a
or redeemed, there shall be documentary stamp tax of [Fifty centavos
collected a documentary stamp tax (P0.50)] ONE PESO (P1.00) on each Two
of Fifty centavos (P0.50) on each 31 hundred pesos (P200), or fractional part
Two hundred pesos (P200), or thereof, of the premium or installment
fractional part thereof, of the payment on contract price collected. On pre-
premium or installment payment or need plans, the documentary stamp tax
contract price collected. On pre- shall be [Twenty centavos (P0.20)] FORTY
need plans, the documentary stamp CENTAVOS (P0.40) on each Two hundred
tax shall be Twenty centavos pesos (P200), or fractional part thereof, of
(P0.20) on each Two hundred pesos the premium or contribution collected.
(P200), or fractional part thereof,
of the premium or contribution
collected.
11. DST on SEC. 188. Stamp Tax on SEC. 188. Stamp Tax on Certificates. – On Increases the DST on certificates from P15.00
certificates Certificates. – On each certificate of each certificate of damage or otherwise, and to P30.00.
[Section 188] damage or otherwise, and on every on every other certificate or document
other certificate or document issued issued by any customs officer, marine
by any customs officer, marine surveyor, or other person acting as such,
surveyor, or other person acting as and on each certificate issued by a notary
such, and on each certificate issued public, and on each certificate of any
by a notary public, and on each description required by law or by rules or
certificate of any description regulations of a public office, or which is
required by law or by rules or issued for the purpose of giving information,
regulations of a public office, or or establishing proof of a fact, and not
which is issued for the purpose of otherwise specified herein, there shall be
Page 108 of 139
giving information, or establishing collected a documentary stamp tax of
proof of a fact, and not otherwise [Fifteen pesos (P15.00)] THIRTY PESOS
specified herein, there shall be (P30.00).”
collected a documentary stamp tax
of Fifteen pesos (P15.00).
12. DST on SEC. 189. Stamp Tax on Warehouse SEC. 189. Stamp Tax on Warehouse Increases the DST on warehouse receipts
warehouse Receipts. – On each warehouse Receipts. – On each warehouse receipt for from P15.0 to P30.0.
receipts receipt for property held in storage property held in storage in a public or
[Section 189] in a public or private warehouse or private warehouse or yard for any person
yard for any person other than the other than the proprietor of such warehouse
proprietor of such warehouse or or yard, there shall be collected a
yard, there shall be collected a documentary stamp tax of [Fifteen pesos
documentary stamp tax of Fifteen (P15.00)] THIRTY PESOS (P30.00):
pesos (P15.00): Provided, That no Provided, That no tax shall be collected on
tax shall be collected on each each warehouse receipt issued to any one
warehouse receipt issued to any one person in any one calendar month covering
person in any one calendar month property the value of which does not exceed
covering property the value of which Two hundred pesos (P200).
does not exceed Two hundred pesos
(P200).
13. DST on jai- SEC. 190. Stamp Tax on Jai-alai, SEC. 190. Stamp Tax on Jai-alai, Horse Increases the DST on jai-alai, horse race
alai, horse race Horse Race Tickets, Lotto or Other Race, Tickets, Lotto, or Other Authorized tickets, lotto or other authorized numbers
tickets, lotto or Authorized Numbers Games. – On Numbers Games. – On each jai-alai, horse games from P0.10 to P0.20 for the basic DST,
other authorized each jai-alai, horse race ticket, race ticket, lotto, or other authorized and additional DST collected if the cost of
numbers games lotto, or other authorized numbers numbers games, there shall be collected a ticket exceeds P1.00.
[Section 190] games, there shall be collected a documentary stamp tax of [Ten centavos
documentary stamp tax of Ten (P0.10)] TWENTY CENTAVOS (P0.20):
centavos (P0.10): Provided, That if Provided, That if the cost of the ticket
the cost of the ticket exceeds One exceed One peso (P1.00), an additional tax
peso (P1.00), an additional tax of of [Ten centavos (P0.10)] TWENTY
Ten centavos (P0.10) on every One CENTAVOS (P0.20) on every One peso
peso (P1.00), or fractional part (P1.00). or fractional part thereof, shall be
thereof, shall be collected. collected.
14. DST on bills SEC. 191. Stamp Tax on Bills of SEC. 191. Stamp Tax on Bills of Lading or Increases the DST on bills of lading or receipts
of lading or Lading or Receipts. – On each set Receipts. – On each set of bills of lading or from of P1.0 to P2.00 if the value of goods
receipts [Section of bills of lading or receipts (except receipts (except charter party) for any exceeds P100.0 but does not exceed P1,000,
191] charter party) for any goods, goods, merchandise, or effects shipped from and from P10.0 to P20.00 in case the value
merchandise or effects shipped one port or place in the Philippines (except exceeds P1,000.
Page 109 of 139
from one port or place in the on ferries across rivers), or to any foreign
Philippines to another port or place port, there shall be collected a documentary
in the Philippines (except on ferries stamp tax of [One peso (P1.00)] TWO
across rivers), or to any foreign PESOS (P2.00), if the value of such goods
port, there shall be collected a exceeds One hundred pesos (P100) and
documentary stamp tax of One does not exceed One thousand pesos
peso (P1.00), if the value of such (P1,000); [Ten pesos (P10.00)] TWENTY
goods exceeds One hundred pesos PESOS (P20.00), if the value exceeds One
(P100) and does not exceed One thousand pesos (P1,000); Provided,
Thousand pesos (P1,000); Ten however, That freight tickets covering
pesos (P10.00), if the value goods, merchandise or effects carried as
exceeds One thousand pesos accompanied baggage of passengers on land
(P1,000): Provided, however, That and water carriers primarily engaged in the
freight tickets covering goods, transportation of passengers are hereby
merchandise or effects carried as exempt.
accompanied baggage of
passengers on land and water
carriers primarily engaged in the
transportation of passengers are
hereby exempt.
15. DST on SEC. 192. Stamp Tax on Proxies. – SEC. 192. Stamp Tax on Proxies. – On each Increases the DST on proxies from P15.0 to
proxies [Section On each proxy for voting at any proxy for voting at any election of officers of P30.0.
192] election for officers of any company any company or association. Or for any
or association, or for any other other purpose, except proxies issued
purpose, except proxies issued affecting the affairs of associations or
affecting the affairs of associations corporations organized for religious,
or corporations organized for charitable, or literary purposes, there shall
religious, charitable or literary be collected a documentary stamp tax of
purposes, there shall be collected a [Fifteen pesos (P15.00)] THIRTY PESOS
documentary stamp tax of Fifteen (P30.00).
pesos (P15.00).
16. DST on SEC. 193. Stamp Tax on Powers of SEC. 193. Stamp on Tax Powers of Attorney. Increases the DST on powers of attorney from
powers of Attorney. – On each power of – On each power of attorney to perform any P5.0 to P10.0.
attorney attorney to perform any act act whatsoever, except acts connected with
[Section 193] whatsoever, except acts connected the collection of claims due from or accruing
with the collection of claims due to the Government of the Republic of the
from or accruing to the Philippines, or the government of any
Government of the Republic of the province, city or municipality, there shall be
Page 110 of 139
Philippines, or the government of collected a documentary stamp tax of [Five
any province, city or municipality, pesos (P5.00)] TEN PESOS (P10.00).
there shall be collected a
documentary stamp tax of Five
pesos (P5.00).
17. DST on SEC. 194. Stamp Tax on Leases SEC. 194. Stamp Tax on Leases and Other Increases the DST on leases and other hiring
leases and other and Other Hiring Agreements. – On Hiring Agreements. – On each lease, agreements from P3.0 to P6.0.
hiring each lease, agreement, agreement, memorandum, or contract for
agreements memorandum, or contract for hire, hire, use or rent of any lands or tenements,
[Section 194] use or rent of any lands or or portions thereof, there shall be collected a
tenements, or portions thereof, documentary stamp tax of [Three pesos
there shall be collected a (P3.00)] SIX PESOS (P6.00) for the first
documentary stamp tax of Three Two thousand pesos (P2,000), or fractional
pesos (P3.00) for the first Two part thereof, and an additional [One peso
thousand pesos (P2,000), or (P1.00)] TWO PESOS (P2.00) for every
fractional part thereof, and an One thousand pesos (P1,000) or fractional
additional One peso (P1.00) for part thereof, in excess of the first Two
every One Thousand pesos thousand pesos (P2,000) for each year of
(P1,000) or fractional part thereof, the term of said contract or agreement.
in excess of the first Two thousand
pesos (P2,000) for each year of the
term of said contract or agreement.
18. DST on SEC. 195. Stamp Tax on SECTION 195. Stamp Tax on Mortgages, Increases the DST on mortgages, pledges and
mortgages, Mortgages, Pledges and Deeds of Pledges, and Deeds of Trust. – On every deeds of trust from P20.0 to P40.0 when the
pledges and Trust. – On every mortgage or mortgage or pledge of lands, estate, or amount secured does not exceed Five
deeds of trust pledge of lands, estate, or property, real or personal, heritable or thousand pesos (P5,000), and from P10.0 to
[Section 195] property, real or personal, heritable movable, whatsoever, where the same shall P20.0 for the additional DST on each P5,000
or movable, whatsoever, where the be made as a security for the payment of in excess of P5,000.
same shall be made as a security any definite and certain sum of money lent
for the payment of any definite and at the time or previously due and owing or
certain sum of money lent at the forborne to be paid, being payable, and on
time or previously due and owing any conveyance of land, estate, or property
or forborne to be paid, being whatsoever, in trust or to be sold, or
payable, and on any conveyance of otherwise converted into money which shall
land, estate, or property be and intended only as security, either by
whatsoever, in trust or to be sold, express stipulation or otherwise, there shall
or otherwise converted into money collected a documentary stamp tax at the
which shall be and intended only as following rates:
Page 111 of 139
security, either by express
stipulation or otherwise, there shall
be collected a documentary stamp
tax at the following rates:

(a) When the amount secured does (a) When the amount secured does not
not exceed Five thousand pesos exceed Five thousand pesos (P5,000),
(P5,000), Twenty pesos (P20.00). [Twenty pesos (P20.00)] FORTY PESOS
(P40.00).

(b) On each Five thousand pesos (b) On each Five thousand pesos (P5,000),
(P5,000), or fractional part thereof or fractional part thereof in excess of Five
in excess of Five thousand pesos thousand pesos (P5,000), an additional tax
(P5,000), an additional tax of Ten of [Ten pesos (P10.00)] TWENTY PESOS
pesos (P10.00). (P20.00).
19. DST on deeds SEC. 196. Stamp Tax on Deeds of SEC. 196. Stamp tax on Deeds of Sale, Subjects donations of real property to the
of sale and Sale and Conveyances of Real [and] Conveyances AND DONATION of same rate of DST on deeds of sale and
conveyances of Property. – On all conveyances, Real Property. - On all conveyances, conveyances of real property at P15.0 for
real property deeds, instruments, or writings, DONATIONS, deeds, instruments, or each P1,000, with the exception of donations
[Section 196] other than grants, patents or writings, other than grants, patents or or transfers of real property exempt from
original certificates of adjudication original certificates of adjudication issued by donor’s tax under Section 101 (A) and (B)
issued by the Government, the Government, whereby any land, such as gifts made to qualified non-stock,
whereby any land, tenement or tenement, or other realty sold shall be non-profit organization which shall be exempt
other realty sold shall be granted, granted, assigned, transferred, DONATED from DST.
assigned, transferred or otherwise or otherwise conveyed to the purchaser, or
conveyed to the purchaser, or purchasers, or to any other person or
purchasers, or to any other person persons designated by such purchaser or
or persons designated by such purchasers, OR DONEE, there shall be
purchaser or purchasers, there collected a documentary stamp tax, at the
shall be collected a documentary rates herein below prescribed, based on the
stamp tax, at the rates herein consideration contracted to be paid for such
below prescribed, based on the realty or on its fair market value determined
consideration contracted to be paid in accordance with Section 6(E) of this Code,
for such realty or on its fair market whichever is higher: Provided, That when
value determined in accordance one of the contracting parties is the
with Section 6(E) of this Code, Government the tax herein imposed shall be
whichever is higher: Provided, That based on the actual consideration.
when one of the contracting parties
Page 112 of 139
is the Government, the tax herein
imposed shall be based on the
actual consideration:

(a) When the consideration, or (a) When the consideration, or value


value received or contracted to be received or contracted to be paid for such
paid for such realty, after making realty, after making proper allowance of any
proper allowance of any encumbrance, does not exceed One
encumbrance, does not exceed One thousand pesos (P1,000), Fifteen pesos
thousand pesos (P1,000), Fifteen (P15.00).
pesos (P15.00).

(b) For each additional One (b) For each additional One thousand pesos
thousand Pesos (P1,000), or (P1,000) or fractional part thereof in excess
fractional part thereof in excess of of One thousand pesos (P1,000) of such
One thousand pesos (P1,000) of consideration or value, Fifteen pesos
such consideration or value, Fifteen (P15.00).
pesos (P15.00).

TRANSFERS EXEMPT FROM DONOR’S


TAX UNDER SECTION 101 (A) AND (B)
OF THIS CODE SHALL BE EXEMPT FROM
THE TAX IMPOSED UNDER THIS
SECTION.

When it appears that the amount of When it appears that the amount of the
the documentary stamp tax documentary stamp tax payable hereunder
payable hereunder has been has been reduced by an incorrect statement
reduced by an incorrect statement of the consideration in any conveyance,
of the consideration in any deed, instrument or writing subject to such
conveyance, deed, instrument or tax the Commissioner, provincial or city
writing subject to such tax the Treasurer, or other revenue officer shall,
Commissioner, provincial or city from the assessment rolls or other reliable
Treasurer, or other revenue officer source of information, assess the property of
shall, from the assessment rolls or its true market value and collect the proper
other reliable source of information, tax thereon.
assess the property of its true

Page 113 of 139


market value and collect the proper
tax thereon.
20. DST on SEC. 197. Stamp Tax on Charter SEC. 197. Stamp Tax on Charter Parties and Increased the DST on charter parties and
charter parties Parties and Similar Instruments. – Similar Instruments. – On every charter similar instruments, as follows:
and similar On every charter party, contract or party, contract or agreement for the charter
instruments agreement for the charter of any of any ship, vessel or streamer, or any letter Gross Tonnage Current Rate New Rate
[Section 197] ship, vessel or steamer, or any or memorandum or other writing between 1,000 tons and P500 and for P1,000 and for
less and each month or each month or
letter or memorandum or other the captain, master or owner, or other duration of fraction of a fraction of a
writing between the captain, person acting as agent of any ship, vessel or contract does month in month in
master or owner, or other person steamer, and any other person or persons not exceed 6 excess of six excess of six
acting as agent of any ship, vessel for or relating to the charter of any such months (6) months, (6) months,
or steamer, and any other person ship, vessel or streamer, and on any additional additional
P50.00 P100.0
or persons for or relating to the renewal or transfer of such charter, contract, More than P1,000 and for P2,000 and for
charter of any such ship, vessel or agreement, letter or memorandum, there 1,000 tons but each month or each month or
steamer, and on any renewal or shall be collected a documentary stamp tax does not fraction of a fraction of a
transfer of such charter, contract, at the following rates: exceeds month in month in
10,000 tons excess of six excess of six
agreement, letter or memorandum,
and duration of (6) months, (6) months,
there shall be collected a contract does additional P200.00
documentary stamp tax at the not exceed 6 P100.0
following rates: months
More than P1,500 and for P3,000 and for
10,000 and each month or each month or
(a) If the registered gross tonnage (a) If the registered gross tonnage of the duration of fraction of a fraction of a
of the ship, vessel or steamer does ship, vessel or steamer does not exceed one contract does month in month in
not exceed one thousand (1,000) thousand (1,000) tons, and the duration of not exceed 6 excess of six excess of six
tons, and the duration of the the charter or contract does not exceed six months (6) months, (6) months,
P150.00 P300.00
charter or contract does not exceed (6) months, [Five hundred pesos (P500)]
six (6) months, Five hundred pesos ONE THOUSAND PESOS (P1,000); and
(P500); and for each month or for each month or fraction of a month in
fraction of a month in excess of six excess of six (6) months, an additional tax
(6) months, an additional tax of of [Fifty pesos (P50.00)] ONE HUNDRED
Fifty pesos (P50.00) shall be paid. PESOS (P100) shall be paid.

(b) If the registered gross tonnage (b) If the registered gross tonnage exceeds
exceeds one thousand (1,000) tons one thousand (1,000) tons and does not
and does not exceed ten thousand exceed ten thousand (10,000) tons, and the
(10,000) tons, and the duration of duration of the charter or contract does not
the charter or contract does not exceed six (6) months, [One thousand pesos
exceed six (6) months, One (P1,000)] TWO THOUSAND PESOS
Page 114 of 139
thousand pesos (P1,000); and for (P2,000); and for each month or fraction of
each month or fraction of a month a month in excess of six (6) months, an
in excess of six (6) months, an additional tax of [One hundred pesos
additional tax of One hundred (P100)] TWO HUNDRED PESOS (P200)
pesos (P100) shall be paid. shall be paid.

(c) If the registered gross tonnage (c) If the registered gross tonnage exceeds
exceeds ten thousand (10,000) ten thousand (10,000) tons and the duration
tons and the duration of the charter of the charter or contract does not exceed
or contract does not exceed six (6) six (6) months, [One thousand five hundred
months, One thousand five hundred pesos (P1,500)] THREE THOUSAND
pesos (P1,500); and for each PESOS (P3,000); and for each month or
month or fraction of a month in fraction of a month in excess of six (6)
excess of six (6) months, an months, an additional tax of [One hundred
additional tax of One hundred fifty fifty pesos (P150)] THREE HUNDRED
pesos (P150) shall be paid. PESOS (P300) shall be paid.

Page 115 of 139


VII. Others
Tax Code Present Provision TRAIN Amendment Reform Measure
Provision
1. Power of the (B) To obtain on a regular basis from (B) To obtain on a regular basis from any Mandates the Cooperative Development
Commissioner to any person other than the person person other than the person whose Authority (CDA) to submit to the Bureau of
Obtain whose internal revenue tax liability is internal revenue tax liability is subject to Internal Revenue a tax incentive report which
Information, and subject to audit or investigation, or audit or investigation, or from any office shall contain information such as income tax,
to Summon, from any office or officer of the national or officer of the national and local VAT and other tax incentives enjoyed by
Examine, and and local governments, government governments, government agencies and cooperatives registered under Republic Act
Take Testimony agencies and instrumentalities, instrumentalities, including the Bangko No. 6983.
of Persons including the Bangko Sentral ng Sentral ng Pilipinas and government-
[Section 5(B)] Pilipinas and government-owned or - owned or -controlled corporations, any
controlled corporations, any information such as, but not limited to,
information such as, but not limited to, costs and volume of production, receipts
costs and volume of production, or sales and gross incomes of taxpayers,
receipts or sales and gross incomes of and the names, addresses, and financial
taxpayers, and the names, addresses, statements of corporations, mutual fund
and financial statements of companies, insurance companies,
corporations, mutual fund companies, regional operating headquarters of
insurance companies, regional multinational companies, joint accounts,
operating headquarters of multinational associations, joint ventures or consortia
companies, joint accounts, and registered partnerships, and their
associations, joint ventures or consortia members; PROVIDED, THAT THE
and registered partnerships, and their COOPERATIVES DEVELOPMENT
members; AUTHORITY SHALL SUBMIT TO THE
BUREAU A TAX INCENTIVE REPORT,
WHICH SHALL INCLUDE
INFORMATION ON THE INCOME TAX,
VALUE-ADDED TAX AND OTHER TAX
INCENTIVES AVAILED OF BY
COOPERATIVES REGISTERED AND
ENJOYING INCENTIVES UNDER
REPUBLIC ACT NO. 6983, AS
AMENDED: PROVIDED, FURTHER,
THAT THE INFORMATION SUBMITTED
BY THE COOPERATIVES
DEVELOPMENT AUTHORITY TO THE
BUREAU SHALL BE SUBMITTED TO
Page 116 of 139
THE DEPARTMENT OF FINANCE AND
SHALL BE INCLUDED IN THE
DATABASE CREATED UNDER
REPUBLIC ACT NO. 10708,
OTHERWISE KNOWN AS ‘THE TAX
INCENTIVES MANAGEMENT AND
TRANSPARENCY ACT (TIMTA)’.
2. Power of the (A) Examination of Returns and (A) Examination of Returns and Provides authority to the BIR to make an
Commissioner to Determination of Tax Due. – After a Determination of Tax Due. – After a examination of the taxpayer’s record
Make return has been filed as required under return has been filed as required under notwithstanding any provision in other laws
Assessments the provisions of this Code, the the provisions of this Code, the requiring the prior authorization or
and Prescribe Commissioner or his duly authorized Commissioner or his duly authorized requirement to obtain approval of concerned
Additional representative may authorize the representative may authorize the government agency or instrumentality in the
Requirements examination of any taxpayer and the examination of any taxpayer and the conduct of tax audit or examination of
for Tax assessment of the correct amount of assessment of the correct amount of tax, taxpayers.
Administration tax: Provided, however, That failure to NOTWITHSTANDING ANY LAW
and file a return shall not prevent the REQUIRING THE PRIOR
Enforcement. Commissioner from authorizing the AUTHORIZATION OF ANY
[Section 6(A)] examination of any taxpayer. GOVERNMENT AGENCY OR
INSTRUMENTALITY: Provided,
however, That failure to file a return shall
not prevent the Commissioner from
authorizing the examination of any
taxpayer.
3. Authority to (E) Authority of the Commissioner to (E) Authority of the Commissioner to 1. Makes it mandatory for the BIR to consult
prescribe real Prescribe Real Property Values. – The Prescribe Real Property Values. - The competent appraisers in determining the fair
property values Commissioner is hereby authorized to Commissioner is hereby authorized to market values of real properties. Prior
[Section 6(E)] divide the Philippines into different divide the Philippines into different zones notification of affected taxpayers also
zones or areas and shall, upon or areas and shall, upon MANDATORY mandated in determining the fair market
consultation with competent appraisers consultation with competent appraisers values of properties.
both from the private and public both from the private and public sectors, 2. Requires publication of revised zonal
sectors, determine the fair market AND WITH PRIOR NOTICE TO values in a newspaper of general circulation in
value of real properties located in each AFFECTED TAXPAYERS, determine the concerned local government unit or its posting
zone or area. For purposes of fair market value of real properties in the provincial capitol, city or municipal hall
computing any internal revenue tax, located in each zone or area, SUBJECT and in two other conspicuous public places.
the value of the property shall be, TO AUTOMATIC ADJUSTMENT ONCE 3. Automatic adjustment of fair market values
whichever is the higher of: EVERY THREE (3) YEARS THROUGH once every three years subject to rules and
RULES AND REGULATIONS ISSUED regulations to be issued by the Secretary of
Page 117 of 139
(a) the fair market value as BY THE SECRETARY OF FINANCE Finance based on Philippine valuation
determined by the BASED ON THE CURRENT standards.
Commissioner; or PHILIPPINE VALUATION
(b) the fair market value as shown STANDARDS: PROVIDED, THAT NO
in the schedule of values of the ADJUSTMENT IN ZONAL VALUATION
Provincial and City Assessors. SHALL BE VALID UNLESS PUBLISHED
IN A NEWSPAPER OF GENERAL
CIRCULATION IN THE PROVINCE,
CITY OR MUNICIPALITY
CONCERNED, OR IN THE ABSENCE
THEREOF, SHALL BE POSTED IN THE
PROVINCIAL CAPITOL, CITY OR
MUNICIPAL HALL AND IN TWO (2)
OTHER CONSPICUOUS PUBLIC
PLACES THEREIN: PROVIDED,
FURTHER, THAT THE BASIS OF ANY
VALUATION, INCLUDING THE
RECORDS OF CONSULTATIONS
DONE, SHALL BE PUBLIC RECORDS
OPEN TO THE INQUIRY OF ANY
TAXPAYER. For purposes of computing
any internal revenue tax, the value of the
property shall be, whichever is the higher
of:

(1) The fair market value as determined


by the Commissioner; or

(2) The fair market value as shown in the


schedule of values of the Provincial and
City Assessors.
4.Keeping of SEC. 232. Keeping of Books of SEC. 232. Keeping of Books of Accounts.
books of Accounts. – –
accounts
[Section 232] (A) Corporations, Companies, (A) Corporations, Companies,
Partnerships or Persons Required to Partnerships or Persons Required to Keep
Keep Books of Accounts. – All Books of Accounts. – All corporations,
corporations, companies, partnerships companies, partnerships or persons
Page 118 of 139
or persons required by law to pay required by law to pay internal revenue
internal revenue taxes shall keep a taxes shall keep and [a journal and a 1. Eliminates the option granted to taxpayers
journal and a ledger or their ledger or their equivalents: Provided, with P50,000 and below quarterly sales,
equivalents: Provided, however, That however, That those whose quarterly earnings, receipts or output of taxpayers to
those whose quarterly sales, earnings, sales, earnings, receipts, or output do use simplified set of bookkeeping records.
receipts, or output do not exceed Fifty not exceed Fifty thousand pesos
thousand pesos (P50,000) shall keep (P50,000) shall keep and use simplified]
and use simplified set of bookkeeping USE RELEVANT AND APPROPRIATE
records duly authorized by the set of bookkeeping records duly
Secretary of Finance wherein all authorized by the Secretary of Finance
transactions and results of operations wherein all transactions and results of
are shown and from which all taxes due operations are shown and from which all
the Government may readily and taxes due the Government may readily
accurately be ascertained and and accurately be ascertained and
determined any time of the year: determined any time of the year:
Provided, further, That corporations, Provided, [further,] That corporations,
companies, partnerships or persons companies, partnerships or persons
whose gross quarterly sales, earnings, whose gross ANNUAL [quarterly] sales, 2. Increases the threshold amount of gross
receipts or output exceed One hundred earnings, receipts or output exceed quarterly sales, earnings, receipts or output
fifty thousand pesos (P150,000), shall THREE MILLION (P3,000,000) [One from P150,000 to P3M of taxpayers which are
have their books of accounts audited hundred fifty thousand pesos required to have their books of accounts
and examined yearly by independent (P150,000)], shall have their books of audited and examined by independent CPAs.
Certified Public Accountants and their accounts audited and examined yearly by
income tax returns accompanied with a independent Certified Public Accountants
duly accomplished Account Information and their income tax returns
Form (AIF) which shall contain, among accompanied with a duly accomplished
others, information lifted from certified Account Information Form (AIF) which
balance sheets, profit and loss shall contain, among others, information
statements, schedules listing income- lifted from certified balance sheets, profit
producing properties and the and loss statements, schedules listing
corresponding income therefrom and income-producing properties and the
other relevant statements. corresponding income therefrom and
other relevant statements.
5. Registration SEC. 236. Registration Requirements. - “SEC. 236. Registration Requirements. –
Requirements
(Section 236) (A) Requirements. - “(A) Requirements.

xxx xxx
Page 119 of 139
The registration shall contain the The registration shall contain the
taxpayer's name, style, place of taxpayer’s name, style, place of
residence, business and such other residence, business and such other
information as may be required by the information as may be required by the
Commissioner in the form prescribed Commissioner in the form prescribed
therefor. therefor[.]: PROVIDED, THAT THE 1. Mandates the Commissioner to simplify
COMMISSIONER SHALL SIMPLIFY business registration and compliance
THE BUSINESS REGISTRATION AND requirements of self-employed individuals
TAX COMPLIANCE REQUIREMENTS and/or professionals.
OF SELF-EMPLOYED INDIVIDUALS
AND/OR PROFESSIONALS.

xxx xxx

(G) Persons Required to Register for (G) Persons Required to Register for
Value-Added Tax. – Value-Added Tax. –

(1) x x x (1) x x x

(a) His gross sales or receipts for the (a) His gross sales or receipts for the 2. Increases the threshold amount of annual
past twelve (12) months, other than past twelve (12) months, other than gross sales/receipts of taxpayers required to
those that are exempt under Section those that are exempt under Section register under VAT from P1.5M to P3M.
109(A) to (V), have exceeded One 109(A) to [(V)] (BB), have exceeded
million five hundred thousand pesos [One million five hundred thousand
(P1,500,000); or pesos (P1,500,00)] THREE MILLION
PESOS (P3,000,000); or

(b) There are reasonable grounds to (b) There are reasonable grounds to
believe that his gross sales or receipts believe that his gross sales or receipts for
for the next twelve (12) months, other the next twelve (12) months, other than
than those that are exempt under those that are exempt under Section
Section 109(A) to (V), will exceed One 109(A) to [(V)] (BB), will exceed [One
million five hundred thousand pesos million five hundred pesos (P1,500,000)]
(P1,500,000); or THREE MILLION PESOS (P3,000,000)

xxx xxx

Page 120 of 139


(H) Optional Registration for Value- (H) Optional Registration for Value-
Added Tax of Exempt Person. – Added Tax of Exempt Person. –

(1) Any person who is not required to (1) Any person who is not required to
register for value-added tax under register for value-added tax under
Subsection (G) hereof may elect to Subsection (G) hereof may elect to
register for value-added tax by register for value-added tax by
registering with the Revenue District registering with the Revenue District
Office that has a jurisdiction over the Office that has a jurisdiction over the
head office of that person, and paying head office of that person, and paying
the annual registration fee in the annual registration fee in Subsection
Subsection (B) hereof. (B) hereof.

(2) Any person who elects to register (2) Any person who elects to register
under this Subsection shall not be under this Subsection shall not be
entitled to cancel his registration under entitled to cancel his registration under
Subsection (F) (2) for the next three (3) Subsection (F) (2) for the next three (3)
years. years.

PROVIDED, THAT ANY PERSON 3. Disqualifies self-employed individuals


TAXED UNDER SECTION 24(A)(2)(B) and/or professionals who elected to pay 8%
AND 24(A)(2)(C)(2)(A) OF THE NIRC tax from availing of the optional VAT
WHO ELECTED TO PAY THE EIGHT registration.
PERCENT (8%) TAX ON GROSS
SALES OR RECEIPTS SHALL NOT BE
ALLOWED TO AVAIL OF THIS
OPTION.

For purposes of Title IV of this code, any For purposes of Title IV of this Code, any
person who has registered value-added person who has registered value-added
tax as a tax type in accordance with the tax as a tax type in accordance with the
provisions of Subsection (C) hereof provisions of Subsection (C) hereof shall
shall be referred to as a "VAT-registered be referred to as a "VAT-registered
person" who shall be assigned only one person" who shall be assigned only one
Taxpayer Identification Number (TIN). Taxpayer Identification Number (TIN).”
6. Issuance of SEC. 237. Issuance of Receipts or Sales “SEC. 237. Issuance of Receipts or Sales
receipts or sales or Commercial Invoices. – or Commercial Invoices. –
or commercial
Page 121 of 139
invoices [Section All persons subject to an internal (A) ISSUANCE. – All persons subject to
237] revenue tax shall, for each sale and an internal revenue tax shall, [for] AT
transfer of merchandise or for services THE POINT OF each sale and transfer of
rendered valued at Twenty-five pesos merchandise or for services rendered 1. Increases from P25 to P100 the threshold
(P25.00) or more, issue duly registered valued at [Twenty-five] ONE HUNDRED amount of sale, transfer of merchandise, or
receipts or sale or commercial invoices, pesos (P[25]100.00) or more, issue duly sale of service which is required to be issued a
prepared at least in duplicate, showing registered receipts or saleS or duly-registered receipt or sale or commercial
the date of transaction, quantity, unit commercial invoices, [prepared at least invoice.
cost and description of merchandise or in duplicate,] showing the date of
nature of service: Provided, however, transaction, quantity, unit cost and
That where the receipt is issued to description of merchandise or nature of
cover payment made as rentals, service: Provided, however, That where
commissions, compensation or fees, the receipt is issued to cover payment
receipts or invoices shall be issued made as rentals, commissions,
which shall show the name, business compensation or fees, receipts or
style, if any, and address of the invoices shall be issued which shall show
purchaser, customer or client. the name, business style, if any, and
address of the purchaser, customer or
client: Provided, Further, That where the
purchaser is a VAT-registered person, in
addition to the information herein
required, the invoice or receipt shall
further show the Taxpayer Identification
Number (TIN) of the purchaser.

WITHIN FIVE (5) YEARS FROM THE 2. Makes it mandatory for taxpayers
EFFECTIVITY OF THIS ACT AND engaged in export of goods and services, e-
UPON THE ESTABLISHMENT OF A commerce, and large taxpayers to issue
SYSTEM CAPABLE OF STORING AND electronic receipts or sales or commercial
PROCESSING THE REQUIRED DATA, invoices, in lieu of manual receipts or sales or
THE BUREAU SHALL REQUIRE commercial invoices, within five years from
TAXPAYERS ENGAGED IN THE the effectivity of the law and upon
EXPORT OF GOODS AND SERVICES, establishment by the BIR of a system capable
TAXPAYERS ENGAGED IN E- of successfully storing and processing the data
COMMERCE, AND TAXPAYERS UNDER collected from the receipts and/or invoices of
THE JURISDICTION OF THE LARGE taxpayers required to issues electronic
TAXPAYERS SERVICE TO ISSUE receipts. Taxpayers not mandated by this
ELECTRONIC RECEIPTS OR SALES OR
Page 122 of 139
COMMERCIAL INVOICES IN LIEU OF provision may opt to issue electronic receipts
MANUAL RECEIPTS OR SALES OR and invoices.
COMMERCIAL INVOICES, SUBJECT
TO RULES AND REGULATIONS TO BE
ISSUED BY THE SECRETARY OF
FINANCE UPON RECOMMENDATION
OF THE COMMISSIONER AND AFTER
A PUBLIC HEARING SHALL HAVE
BEEN HELD FOR THIS PURPOSE;
PROVIDED, THAT TAXPAYERS NOT
COVERED BY THE MANDATE OF THIS
PROVISION MAY ISSUE ELECTRONIC
RECEIPTS OR, SALES OR
COMMERCIAL INVOICES, IN LIEU OF
MANUAL RECEIPTS, AND SALES AND
COMMERCIAL INVOICES.

The original of each receipt or invoice The original of each receipt or invoice
shall be issued to the purchaser, shall be issued to the purchaser,
customer or client at the time the customer or client at the time the
transaction is effected, who, if engaged transaction is effected, who, if engaged
in business or in the exercise of in business or in the exercise of
profession, shall keep and preserve the profession, shall keep and preserve the
same in his place of business for a same in his place of business for a period
period of three (3) years from the close of three (3) years from the close of the
of the taxable year in which such taxable year in which such invoice or
invoice or receipt was issued, while the receipt was issued, while the duplicate
duplicate shall be kept and preserved shall be kept and preserved by the
by the issuer, also in his place of issuer, also in his place of business, for a
business, for a like period. like period: PROVIDED, THAT IN CASE 3. Requires taxpayers to keep and preserve
OF ELECTRONIC RECEIPTS OR SALES the digital records of electronic invoices and
OR COMMERCIAL INVOICES, THE receipts for three years in the taxpayers’ place
DIGITAL RECORDS OF THE SAME of business.
SHALL BE KEPT BY THE PURCHASER,
CUSTOMER OR CLIENT AND THE
ISSUER FOR THE SAME PERIOD
ABOVE STATED.

Page 123 of 139


The Commissioner may, in meritorious The Commissioner may, in meritorious
cases, exempt any person subject to an cases, exempt any person subject to
internal revenue tax from compliance internal revenue tax from compliance
with the provisions of this Section. with the provisions of this Section.
7. Electronic None. SEC. 237-A. ELECTRONIC SALES 1. Requires taxpayers engaged in export of
Sales Reporting REPORTING SYSTEM. – WITHIN FIVE goods and services and large taxpayers to
System [Section (5) YEARS FROM THE EFFECTIVITY report electronically heir sales data to the BIR
237-A] OF THIS ACT AND UPON THE through the use of electronic point of sales
ESTABLISHMENT OF A SYSTEM system. The machines and other devices to be
CAPABLE OF STORING AND used for this purpose shall be at the expense
PROCESSING THE REQUIRED DATA, of the taxpayers.
THE BUREAU SHALL REQUIRE
TAXPAYERS ENGAGED IN THE
EXPORT OF GOODS AND SERVICES,
AND TAXPAYERS UNDER THE
JURISDICTION OF THE LARGE
TAXPAYERS SERVICE TO
ELECTRONICALLY REPORT THEIR
SALES DATA TO THE BUREAU
THROUGH THE USE OF ELECTRONIC
POINT OF SALES SYSTEMS, SUBJECT
TO RULES AND REGULATIONS TO BE
ISSUED BY THE SECRETARY OF
FINANCE AS RECOMMENDED BY THE
COMMISSIONER OF INTERNAL
REVENUE; PROVIDED, THAT THE
MACHINES, FISCAL DEVICES, AND
FISCAL MEMORY DEVICES SHALL BE
AT THE EXPENSE OF THE
TAXPAYERS.

THE DATA PROCESSING OF SALES 2. Mandates that the data processing of sales
AND PURCHASE DATA SHALL and purchase data needs to comply with the
COMPLY WITH THE PROVISIONS OF provision of Republic Act No. 10173 (Data
REPUBLIC ACT NO. 10173 Privacy Act) and Section 270 of the NIRC, as
OTHERWISE KNOWN AS THE “DATA amended.
PRIVACY ACT” AND SECTION 270 OF
THE NIRC, AS AMENDED, ON
Page 124 of 139
UNLAWFUL DIVULGENCE OF
TAXPAYER INFORMATION AND SUCH
OTHER LAWS RELATING TO THE
CONFIDENTIALITY OF
INFORMATION.

THE BUREAU SHALL ALSO


ESTABLISH POLICIES, RISK
MANAGEMENT APPROACHES,
ACTIONS, TRAININGS, AND
TECHNOLOGIES TO PROTECT THE
CYBER ENVIRONMENT,
ORGANIZATION, AND DATA IN
COMPLIANCE WITH REPUBLIC ACT
NO. 10175 OR THE “CYBERCRIME
PREVENTION ACT OF 2012.
8. Interest SEC. 249. Interest. - “SEC. 249. Interest. –
[Section 249]
(A) In General. - There shall be (A) In General. - There shall be assessed 1. Interest that may be imposed on unpaid
assessed and collected on any unpaid and collected on any unpaid amount of amount of tax shall be twice the legal rate for
amount of tax, interest at the rate of tax, interest at the rate of DOUBLE THE loans or forbearance as set by the Bangko
twenty percent (20%) per annum, or LEGAL INTEREST RATE FOR LOANS Sentral ng Pilipinas (BSP) instead of current
such higher rate as may be prescribed OR FORBEARANCE OF ANY MONEY IN 20% interest rate.
by rules and regulations, from the date THE ABSENCE OF AN EXPRESS
prescribed for payment until the STIPULATION AS SET BY THE
amount is fully paid. BANGKO SENTRAL NG PILIPINAS
[twenty percent (20%) per annum, or
such higher rate as may be prescribed by
rules and regulations,] from the date
prescribed for payment until the amount
is fully paid[.]: PROVIDED, THAT IN 2. Deficiency and delinquency interest may
NO CASE SHALL THE DEFICIENCY no longer be imposed simultaneously.
AND THE DELINQUENCY INTEREST
PRESCRIBED UNDER SUBSECTION
(B) AND (C) HEREOF, BE IMPOSED
SIMULTANEOUSLY.

Page 125 of 139


(B) Deficiency Interest. - Any (B) Deficiency Interest. - Any deficiency 3. Deficiency interest shall be assessed and
deficiency in the tax due, as the term in the tax due, as the term is defined in collected from the date prescribed for its
is defined in this Code, shall be subject this Code, shall be subject to the interest payment until the full payment or upon
to the interest prescribed in Subsection prescribed in Subsection (A) hereof, issuance of a notice and demand by the
(A) hereof, which interest shall be which interest shall be assessed and Commissioner, whichever comes earlier.
assessed and collected from the date collected from the date prescribed for its
prescribed for its payment until the full payment until the full payment thereof,
payment thereof. OR UPON ISSUANCE OF A NOTICE
AND DEMAND BY THE
COMMISSIONER OF INTERNAL
REVENUE, WHICHEVER COMES
EARLIER.

(C) Delinquency Interest. – xxx” (C) Delinquency Interest. – xxx”


9. Penalty on SEC. 254. Attempt to Evade or Defeat “SEC. 254. Attempt to Evade or Defeat Increases the fine imposed on persons who
attempt to evade Tax. – Any person who willfully Tax. – Any person who willfully attempts willfully attempts to evade or defeat tax to
tax [Section attempts in any manner to evade or in any manner to evade or defeat any tax P500,000 but not more than P10M and
254] defeat any tax imposed under this imposed under this Code or the payment imprisonment of not less than six years but
Code or the payment thereof shall, in thereof shall, in addition to other not more than ten years. The current penalty
addition to other penalties provided by penalties provided by law, upon imposed is a fine of not less than P30,000 but
law, upon conviction thereof, be conviction thereof, be punished [by a not more than P100,000 and imprisonment of
punished by a fine of not less than fine of not less than Thirty thousand not less than two years but not more than
Thirty thousand pesos (P30,000) but pesos (P30,000) but not more than One four years.
not more than One hundred thousand hundred thousand pesos (P100,000) and
pesos (P100,000) and suffer suffer imprisonment of not less than two
imprisonment of not less than two (2) (2) years but not more than four (4)
years but not more than four (4) years:] WITH A FINE OF NOT LESS
years: Provided, That the conviction or THAN FIVE HUNDRED THOUSAND
acquittal obtained under this Section PESOS (P500,000) BUT NOT MORE
shall not be a bar to the filing of a civil THAN TEN MILLION PESOS
suit for the collection of taxes. (P10,000,000), AND IMPRISONMENT
OF NOT LESS THAN SIX (6) YEARS
BUT NOT MORE THAN TEN (10)
YEARS: Provided, That the conviction or
acquittal obtained under this Section
shall not be a bar to the filing of a civil
suit for the collection of taxes.”

Page 126 of 139


10. Penalty on Sec. 264. Failure or Refusal to Issue “SEC. 264. Failure or Refusal to Issue Increases the administrative fine to not less
various Receipts or Sales or Commercial Receipts or Sales or Commercial than P500,000 up to P10M and imprisonment
violations Invoices, Violations Related to the Invoices, Violations Related to the of not less than six years but not more than
involving Printing of such Receipts or Invoices Printing of such Receipts or Invoices and ten years imposed on persons who: (a) print
printing of and Other Violations. – Other Violations. – invoices or receipts without authority from the
receipts [Section BIR, (b) print double or multiple sets of
264(b)] (a) x x x “(a) x x x invoices or receipts, (c) print unnumbered
invoices or receipts not bearing the name,
(b) Any person who commits any of the “(b) Any person who commits any of the business style, TIN, and business address of
acts enumerated hereunder shall be acts enumerated hereunder shall be the taxpayer, or (d) print other fraudulent
penalized in the same manner and to penalized [in the same manner and to invoices or receipts.
the same extent as provided for in this the same extent as provided for in this
Section: Section] WITH A FINE OF NOT LESS
THAN FIVE HUNDRED THOUSAND
PESOS (P500,000) BUT NOT MORE
THAN TEN MILLION PESOS
(P10,000,000), AND IMPRISONMENT
OF NOT LESS THAN SIX (6) YEARS
BUT NOT MORE THAN TEN (10)
YEARS:

(1) Printing of receipts or sales or “(1) x x x; [or]


commercial invoices without authority
from the Bureau of Internal Revenue;
or

(2) Printing of double or multiple sets of “(2) x x x; [or]


invoices or receipts; or

(3) Printing of unnumbered receipts or “(3) x x x[.]; OR


sales or commercial invoices, not
bearing the name, business style,
Taxpayer Identification Number, and
business address of the person or
entity.

Page 127 of 139


“(4) PRINTING OF OTHER
FRAUDULENT RECEIPTS OR SALES
OR COMMERCIAL INVOICES.”
11. Failure to SEC. 264-A. FAILURE TO TRANSMIT Imposes a penalty amounting to 1/10 of 1%
transmit sales SALES DATA ENTERED ON CASH of annual net income as reflected in the
data entered on REGISTER MACHINE (CRM)/POINT taxpayer’s audited financial statement for the
cash register OF SALES SYSTEM (POS) MACHINES second year preceding the current taxable
machine (CRM) / TO THE BIR’S ELECTRONIC SALES year for each day of violation or P3,000,
point of sales REPORTING SYSTEM. – ANY whichever is higher, in case of failure of a
system (POS) TAXPAYER REQUIRED TO TRANSMIT taxpayer to transmit sales and purchase data
machines to the SALES DATA TO THE BUREAU’S entered in CRM/POS machines to the BIR
BIR’s electronic ELECTRONIC SALES REPORTING electronic sales reporting system.
sales reporting SYSTEM BUT FAILS TO DO SO, SHALL
system [Section PAY, FOR EACH DAY OF VIOLATION, In case the aggregate days of violation exceed
264-A] A PENALTY AMOUNTING TO ONE- 180 days, an additional penalty of permanent
TENTH OF ONE PERCENT (1/10 OF closure of the taxpayer shall be imposed.
1%) OF THE ANNUAL NET INCOME Such penalty shall not apply in case the failure
AS REFLECTED IN THE TAXPAYER’S is due to force majeure or for causes beyond
AUDITED FINANCIAL STATEMENT the control of the taxpayer.
FOR THE SECOND YEAR PRECEDING
THE CURRENT TAXABLE YEAR FOR
EACH DAY OF VIOLATION OR TEN
THOUSAND PESOS (P10,000),
WHICHEVER IS HIGHER; PROVIDED,
THAT SHOULD THE AGGREGATE
NUMBER OF DAYS OF VIOLATION
EXCEED ONE-HUNDRED EIGHTY
(180) DAYS WITHIN A TAXABLE
YEAR, AN ADDITIONAL PENALTY OF
PERMANENT CLOSURE OF THE
TAXPAYER SHALL BE IMPOSED:
PROVIDED, FURTHER, THAT IF THE
FAILURE TO TRANSMIT IS DUE TO
FORCE MAJEURE OR ANY CAUSES
BEYOND THE CONTROL OF THE
TAXPAYER THE PENALTY SHALL NOT
APPLY.

Page 128 of 139


12. Purchase, “SEC. 264-B. PURCHASE, USE, Includes a new section which provides that
use, possession, POSSESSION, SALE OR OFFER TO any person who uses, purchases and offer a
sale or offer to SELL, INSTALLMENT, TRANSFER, device that is capable of suppressing the
update, upgrade, UPDATE, UPGRADE, KEEPING OR creation of electronic records of sales
keeping or MAINTAINING OF SALES transaction in which the taxpayer is required
maintaining of SUPPRESSION DEVICES. – ANY to maintain and the modification, hiding, or
sales PERSON WHO SHALL PURCHASE, deletion of such and providing a ready means
suppression USE, POSSESS, SELL OR OFFER TO of access to them shall be punished by a fine
devices [Section SELL, INSTALL, TRANSFER, UPDATE, of note less than P500,000 but not more than
264-B] UPGRADE, KEEP, OR MAINTAIN ANY P5M with imprisonment of not less than two to
SOFTWARE OR DEVICE DESIGNED four years. However, a cumulative repression
FOR, OR IS CAPABLE OF (A) of electronic sales record in excess of P50M
SUPPRESSING THE CREATION OF shall be considered as economic sabotage and
ELECTRONIC RECORDS OF SALE be punished in with the maximum penalty
TRANSACTIONS THAT A TAXPAYER under this provision.
IS REQUIRED TO KEEP UNDER
EXISTING TAX LAWS AND/OR
REGULATIONS, OR (B) MODIFYING,
HIDING, OR DELETING ELECTRONIC
RECORDS OF SALES TRANSACTIONS
AND PROVIDING A READY MEANS OF
ACCESS TO THEM, SHALL BE
PUNISHED BY A FINE OF NOT LESS
THAN FIVE HUNDRED THOUSAND
PESOS (P500,000) BUT NOT MORE
THAN TEN MILLION PESOS
(P10,000,000), AND SUFFER
IMPRISONMENT OF NOT LESS THAN
TWO (2) YEARS BUT NOT MORE
THAN FOUR (4) YEARS: PROVIDED,
THAT A CUMULATIVE SUPPRESSION
OF ELECTRONIC SALES RECORD IN
EXCESS OF THE AMOUNT OF FIFTY
MILLION PESOS (P50,000,000)
SHALL BE CONSIDERED AS
ECONOMIC SABOTAGE AND SHALL
BE PUNISHED IN THE MAXIMUM

Page 129 of 139


PENALTY PROVIDED FOR UNDER
THIS PROVISION.”
13. Offenses SEC. 265-A. OFFENSES RELATING TO Imposes the following penalties, in addition to
relating to fuel FUEL MARKING. – ALL OFFENSES the penalties imposed under applicable laws,
marking RELATING TO FUEL MARKING SHALL, in case of offenses relating to fuel marking:
[Section 265-A] IN ADDITION TO THE PENALTIES
IMPOSED UNDER TITLE X OF THE 1. Any person engaged in the sale, trade,
NIRC, AS AMENDED, SECTION 1401 delivery, distribution, or transportation of
OF REPUBLIC ACT NO. 10863, unmarked fuel in commercial quantity held for
OTHERWISE KNOWN AS THE domestic use or merchandise shall be
CUSTOMS MODERNIZATION AND punished as follows:
TARIFF ACT (CMTA), AND OTHER (a) For the first offense, a fine of P2.5M;
RELEVANT LAWS, BE PUNISHABLE (b) For the second offense, a fine of P5M;
AS FOLLOWS: and
(c) For the third offense, a fine of P10M
(A) ANY PERSON WHO IS FOUND TO and revocation of license to engage in
BE ENGAGED IN THE SALE, TRADE, any trade or business.
DELIVERY, DISTRIBUTION OR 2. Any person who causes the removal of the
TRANSPORTATION OF UNMARKED official fuel marking agent from marked fuel,
FUEL IN COMMERCIAL QUANTITY and the adulteration or dilution of fuel
HELD FOR DOMESTIC USE OR intended for sale to the domestic market, or
MERCHANDISE SHALL, UPON the knowing possession, storage, transfer or
CONVICTION, SUFFER THE offer for sale of fuel obtained as a result of
PENALTIES OF: such removal, adulteration, or dilution shall be
penalized in the same manner and extent as
(1) FOR THE FIRST OFFENSE, A FINE provided for in the preceding subsection.
OF TWO MILLION FIVE HUNDRED
THOUSAND PESOS (P2,500,000); 3. Any person who commits any of the acts
enumerated hereunder shall be punished by a
(2) FOR THE SECOND OFFENSE, A fine of not less than P1M but not more than
FINE OF FIVE MILLION PESOS P5M, and suffer imprisonment of not less than
(P5,000,000); AND four years but not more than eight years:
(a) making, importing, selling, using, or
(3) FOR THE THIRD OFFENSE, A FINE possessing fuel markers without
OF TEN MILLION PESOS authority;
(P10,000,000) AND REVOCATION OF (b) making, importing, selling, using or
LICENSE TO ENGAGE IN ANY TRADE possessing counterfeit fuel markers;
OR BUSINESS.
Page 130 of 139
(c) causing another person or entity to
(B) ANY PERSON WHO CAUSES THE commit any of the two preceding acts;
REMOVAL OF THE OFFICIAL FUEL or
MARKING AGENT FROM MARKED (d) causing the sale, distribution, supply,
FUEL, AND THE ADULTERATION OR or transport of legitimately imported,
DILUTION OF FUEL INTENDED FOR in-transit, manufactured, or procured
SALE TO THE DOMESTIC MARKET, OR controlled precursors and essential
THE KNOWING POSSESSION, chemicals, in diluted, mixtures or in
STORAGE, TRANSFER OR OFFER FOR concentrated form, to any person or
SALE OF FUEL OBTAINED AS A entity penalized in subsections (a),
RESULT OF SUCH REMOVAL, (b), or (c) hereof, including but not
ADULTERATION OR DILUTION SHALL limited to packaging, repackaging,
BE PENALIZED IN THE SAME labeling, relabeling, or concealment of
MANNER AND EXTENT AS PROVIDED such transaction through fraud,
FOR IN THE PRECEDING destruction of documents, fraudulent
SUBSECTION. use of permits, misdeclaration, use of
front companies, or mail fraud.
(C) ANY PERSON WHO COMMITS ANY
OF THE ACTS ENUMERATED 4. Any person who willfully inserts, places,
HEREUNDER SHALL, UPON adds, or attaches directly or indirectly,
CONVICTION, BE PUNISHED BY A through any overt or covert act, whatever
FINE OF NOT LESS THAN ONE quantity of any unmarked fuel, counterfeit
MILLION PESOS (P1,000,000) BUT additive, or chemical in the person, house,
NOT MORE THAN FIVE MILLION effects, inventory, or in the immediate vicinity
PESOS (P5,000,000), AND SUFFER of an innocent individual for the purpose of
IMPRISONMENT OF NOT LESS THAN implicating, incriminating or imputing the
FOUR (4) YEARS BUT NOT MORE commission of any violation of this act shall be
THAN EIGHT (8) YEARS: punished by a fine of not less than P5M but
not more than P10M, and suffer imprisonment
(1) MAKING, IMPORTING, SELLING, of not less than four years but not more than
USING OR POSSESSING FUEL eight years.
MARKERS WITHOUT EXPRESS
AUTHORITY; 5. Any person who is authorized, licensed, or
accredited under this act and its implementing
(2) MAKING, IMPORTING, SELLING, rules to conduct fuel tests, who issues false or
USING OR POSSESSING fraudulent fuel test results knowingly,
COUNTERFEIT FUEL MARKERS; willfully, or through gross negligence, shall
suffer the additional penalty of imprisonment
Page 131 of 139
(3) CAUSING ANOTHER PERSON OR ranging from one year and one day to two
ENTITY TO COMMIT ANY OF THE years and six months.
TWO (2) PRECEEDING ACTS; OR
The additional penalties of revocation of the
(4) CAUSING THE SALE, license to practice his/her profession in case
DISTRIBUTION, SUPPLY OR of a practitioner, and the closure of the fuel
TRANSPORT OF LEGITIMATELY testing facility, may also be imposed at the
IMPORTED, IN-TRANSIT, instance of the court.
MANUFACTURED OR PROCURED
CONTROLLED PRECURSORS AND
ESSENTIAL CHEMICALS, IN DILUTED,
MIXTURES OR IN CONCENTRATED
FORM, TO ANY PERSON OR ENTITY
PENALIZED IN SUBSECTIONS (A),
(B), OR (C) HEREOF, INCLUDING BUT
NOT LIMITED TO PACKAGING,
REPACKAGING, LABELING,
RELABELING OR CONCEALMENT OF
SUCH TRANSACTION THROUGH
FRAUD, DESTRUCTION OF
DOCUMENTS, FRAUDULENT USE OF
PERMITS, MISDECLARATION, USE OF
FRONT COMPANIES OR MAIL FRAUD.

(D) ANY PERSON WHO WILLFULLY


INSERTS, PLACES, ADDS OR
ATTACHES DIRECTLY OR
INDIRECTLY, THROUGH ANY OVERT
OR COVERT ACT, WHATEVER
QUANTITY OF ANY UNMARKED FUEL,
COUNTERFEIT ADDITIVE OR
CHEMICAL IN THE PERSON, HOUSE,
EFFECTS, INVENTORY, OR IN THE
IMMEDIATE VICINITY OF AN
INNOCENT INDIVIDUAL FOR THE
PURPOSE OF IMPLICATING,
INCRIMINATING OR IMPUTING THE
COMMISSION OF ANY VIOLATION OF
Page 132 of 139
THIS ACT SHALL, UPON
CONVICTION, BE PUNISHED BY A
FINE OF NOT LESS THAN FIVE
MILLION PESOS (P5,000,000) BUT
NOT MORE THAN TEN MILLION
PESOS (P10,000,000), AND SUFFER
IMPRISONMENT OF NOT LESS THAN
FOUR (4) YEARS BUT NOT MORE
THAN EIGHT (8) YEARS.

(E) ANY PERSON WHO IS


AUTHORIZED, LICENSED OR
ACCREDITED UNDER THIS ACT AND
ITS IMPLEMENTING RULES TO
CONDUCT FUEL TESTS, WHO ISSUES
FALSE OR FRAUDULENT FUEL TEST
RESULTS KNOWINGLY, WILLFULLY
OR THROUGH GROSS NEGLIGENCE,
SHALL SUFFER THE ADDITIONAL
PENALTY OF IMPRISONMENT
RANGING FROM ONE (1) YEAR AND
ONE (1) DAY TO TWO (2) YEARS AND
SIX (6) MONTHS.

THE ADDITIONAL PENALTIES OF


REVOCATION OF THE LICENSE TO
PRACTICE HIS/HER PROFESSION IN
CASE OF A PRACTITIONER, AND THE
CLOSURE OF THE FUEL TESTING
FACILITY, MAY ALSO BE IMPOSED AT
THE INSTANCE OF THE COURT.
14. Violations SEC. 269. Violations Committed by SEC. 269. Violations Committed by Includes failure of any BIR officer to act on
Committed by Government Enforcement Officers. – Government Enforcement Officers. – the application for VAT refunds within the
Government prescribed period under Section 112.
Enforcement xxx xxx
Officers [Section
269(j)] (h) Having knowledge or information (h) Having knowledge or information of
of any violation of this Code or of any any violation of this Code or of any fraud
Page 133 of 139
fraud committed on the revenues committed on the revenues collectible by
collectible by the Bureau of Internal the Bureau of Internal Revenue, failure
Revenue, failure to report such to report such knowledge or information
knowledge or information to their to their superior officer, or failure to
superior officer, or failure to report as report as otherwise required by law; and
otherwise required by law; and

(i) x x x. (i) x x x; AND

(J) DELIBERATE FAUILURE TO ACT


ON THE APPLICATION FOR REFUNDS
WITHIN THE PRESCRIBED PERIOD
PROVIDED UNDER SEC. 112 OF THIS
ACT.
15. Disposition SEC. 288. Disposition of Incremental “SEC. 288. Disposition of Incremental Includes a new provision on the appropriation
of incremental Revenue. – Revenue. – of incremental revenues derived from TRAIN.
revenue [Section At the end of five years from the effectivity of
288(F)] (A) x x x (A) x x x TRAIN Law, all earmarking provisions shall
cease to exist and all incremental revenues to
(B) x x x (B) x x x be derived shall accrue to the general fund of
the government.
(C) x x x (C) x x x

(D) x x x (D) x x x

(E) x x x (E) x x x

(F) INCREMENTAL REVENUES FROM


THE TAX REFORM FOR
ACCELERATION AND INCLUSION
(TRAIN). – FOR FIVE (5) YEARS
FROM THE EFFECTIVITY OF THIS
ACT, THE YEARLY INCREMENTAL
REVENUES GENERATED SHALL BE
AUTOMATICALLY APPROPRIATED AS
FOLLOWS:

Page 134 of 139


(1) NOT MORE THAN SEVENTY
PERCENT (70%) TO
INFRASTRUCTURE PROJECTS SUCH
AS BUT NOT LIMITED TO THE BUILD,
BUILD, BUILD PROGRAM AND
PROVIDE INFRASTRUCTURE
PROGRAMS TO ADDRESS
CONGESTION THROUGH MASS
TRANSPORT AND NEW ROAD
NETWORKS, MILITARY
INFRASTRUCTURE, SPORTS
FACILITIES FOR PUBLIC SCHOOLS,
AND POTABLE DRINKING WATER
SUPPLY IN ALL PUBLIC PLACES; AND

(2) NOT MORE THAN THIRTY


PERCENT (30%) TO FUND:

(A) PROGRAMS UNDER REPUBLIC


ACT NO. 10659, OTHERWISE KNOWN
AS ‘THE SUGARCANE INDUSTRY
DEVELOPMENT ACT OF 2015’, TO
ADVANCE THE SELF-RELIANCE OF
SUGAR FARMERS THAT WILL
INCREASE PRODUCTIVITY, PROVIDE
LIVELIHOOD OPPORTUNITIES,
DEVELOP ALTERNATIVE FARMING
SYSTEMS AND ULTIMATELY
ENHANCE FARMERS’ INCOME;

(B) SOCIAL MITIGATING MEASURES


AND INVESTMENTS IN (i)
EDUCATION, (ii) HEALTH, TARGETED
NUTRITION, AND ANTI-HUNGER
PROGRAMS FOR MOTHERS, INFANTS,
AND YOUNG CHILDREN, (iii) SOCIAL
PROTECTION, (iv) EMPLOYMENT,
AND (v) HOUSING THAT PRIORITIZE
Page 135 of 139
AND DIRECTLY BENEFIT BOTH THE
POOR AND NEAR-POOR
HOUSEHOLDS;

(C) A SOCIAL WELFARE AND


BENEFITS PROGRAM WHERE
QUALIFIED BENEFICIARIES SHALL
BE PROVIDED WITH A SOCIAL
BENEFITS CARD TO AVAIL OF THE
FOLLOWING SOCIAL BENEFITS:

(i) UNCONDITIONAL CASH


TRANSFER TO HOUSEHOLDS IN THE
FIRST TO SEVENTH INCOME DECILES
OF THE NATIONAL HOUSEHOLD
TARGETING SYSTEM FOR POVERTY
REDUCTION (NHTS-PR), PANTAWID
PAMILYANG PILIPINO PROGRAM,
AND THE SOCIAL PENSION
PROGRAM FOR A PERIOD OF THREE
(3) YEARS FROM THE EFFECTIVITY
OF THIS ACT: PROVIDED, THAT THE
UNCONDITIONAL CASH TRANSFER
SHALL BE TWO HUNDRED PESOS
(P200.00) PER MONTH FOR THE
FIRST YEAR AND THREE HUNDRED
PESOS (P300.00) PER MONTH FOR
THE SECOND YEAR AND THIRD YEAR,
TO BE IMPLEMENTED BY THE
DEPARTMENT OF SOCIAL WELFARE
AND DEVELOPMENT (DSWD);

(ii) FUEL VOUCHERS TO QUALIFIED


FRANCHISE HOLDERS OF PUBLIC
UTILITY JEEPNEYS (PUJS);

Page 136 of 139


(iii) FOR MINIMUM WAGE EARNERS,
UNEMPLOYED, AND THE POOREST
50% OF THE POPULATION:

1. FARE DISCOUNT FROM ALL


PUBLIC UTILITY VEHICLES (EXCEPT
TRUCKS FOR HIRE AND SCHOOL
TRANSPORT SERVICE) IN THE
AMOUNT EQUIVALENT TO TEN
PERCENT (10%) OF THE
AUTHORIZED FARE;

2. DISCOUNTED PURCHASE OF
NATIONAL FOOD AUTHORITY (NFA)
RICE FROM ACCREDITED RETAIL
STORES IN THE AMOUNT
EQUIVALENT TO TEN PERCENT
(10%) OF THE NET RETAIL PRICES,
UP TO A MAXIMUM OF TWENTY
KILOS PER MONTH; AND

3. FREE SKILLS TRAINING UNDER A


PROGRAM IMPLEMENTED BY THE
TECHNICAL SKILLS AND
DEVELOPMENT AUTHORITY (TESDA).

PROVIDED, THAT BENEFITS OR


GRANTS CONTAINED IN THIS
SUBSECTION SHALL NOT BE
AVAILED IN ADDITION TO ANY
OTHER DISCOUNTS.

(iv) OTHER SOCIAL BENEFITS


PROGRAMS TO BE DEVELOPED AND
IMPLEMENTED BY THE
GOVERNMENT.

Page 137 of 139


NOTWITHSTANDING ANY
PROVISIONS HEREIN TO THE
CONTRARY, THE INCREMENTAL
REVENUES FROM THE TOBACCO
TAXES UNDER THIS ACT SHALL BE
SUBJECT TO SECTION 3 OF
REPUBLIC ACT NO. 7171,
OTHERWISE KNOWN AS “AN ACT TO
PROMOTE THE DEVELOPMENT OF
THE FARMER IN THE VIRGINIA
TOBACCO PRODUCING PROVINCES”,
AND SECTION 8 OF REPUBLIC ACT
NO. 8240, OTHERWISE KNOWN AS
"AN ACT AMENDING SECTIONS 138,
140, & 142 OF THE NATIONAL
INTERNAL REVENUE CODE, AS
AMENDED, AND FOR OTHER
PURPOSES". AN INTER-AGENCY
COMMITTEE CHAIRED BY THE
DEPARTMENT OF BUDGET AND
MANAGEMENT (DBM) AND CO-
CHAIRED BY DOF AND DSWD, AND
COMPRISED OF NATIONAL
ECONOMIC AND DEVELOPMENT
AUTHORITY (NEDA), DEPARTMENT
OF TRANSPORTATION (DOTR),
DEPARTMENT OF EDUCATION
(DEPED), DEPARTMENT OF HEALTH
(DOH), DEPARTMENT OF LABOR AND
EMPLOYMENT (DOLE), NATIONAL
HOUSING AUTHORITY (NHA), SUGAR
REGULATORY ADMINISTRATION
(SRA), DEPARTMENT OF INTERIOR
AND LOCAL GOVERNMENT (DILG),
DEPARTMENT OF ENERGY (DOE),
NFA, AND TESDA TO OVERSEE THE
IDENTIFICATION OF QUALIFIED
BENEFICIARIES AND THE
Page 138 of 139
IMPLEMENTATION OF THESE
PROJECTS AND PROGRAMS:
PROVIDED, THAT QUALIFIED
BENEFICIARIES UNDER SUBSECTION
(C) HEREOF SHALL BE IDENTIFIED
USING THE NATIONAL ID SYSTEM
WHICH MAY BE ENACTED BY
CONGRESS;

WITHIN SIXTY (60) DAYS FROM THE


END OF THE THREE (3) YEAR PERIOD
FROM THE EFFECTIVITY OF THIS
ACT, THE INTERAGENCY COMMITTEE
AND RESPECTIVE IMPLEMENTING
AGENCIES FOR THE ABOVE
PROGRAMS SHALL SUBMIT
CORRESPONDING PROGRAM
ASSESSMENTS TO THE COCCTRP. THE
NATIONAL EXPENDITURE PROGRAM
FROM 2019 ONWARDS SHALL
PROVIDE LINE ITEMS THAT
CORRESPOND TO THE ALLOCATIONS
MANDATED IN THE PROVISIONS
ABOVE.

AT THE END OF FIVE (5) YEARS


FROM THE EFFECTIVITY OF THIS
ACT, ALL EARMARKING PROVISIONS
UNDER SUBSECTION (F), SHALL
CEASE TO EXIST AND ALL
INCREMENTAL REVENUES DERIVED
UNDER THIS ACT SHALL ACCRUE TO
THE GENERAL FUND OF THE
GOVERNMENT.

Page 139 of 139